Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Broadcasting (Regional Coverage)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mike Hall.]

Dr. George Turner: I am delighted to have the opportunity to introduce this Adjournment debate on an issue of such importance to my constituents. My good fortune in securing the debate enables the House to discuss one of the major issues addressed by the Digital Television Broadcasting Bill, which I introduced last week under the ten-minute rule.
I shall briefly remind the House of the specific nature of the problem, which concerns terrestrial television. The services of each regional television broadcaster are transmitted from specific locations. However, in some areas, the lie of the land and the physical characteristics of UHF electromagnetic waves prevent some communities from receiving signals from the transmitters assigned to their appropriate regional broadcaster. Instead, the signal from a transmitter targeted at a different region may be the only one that they are able to receive. Those viewers can watch only regional programming services intended for others. That is the problem.
For many years, solutions that used additional transmitters or relays have been constrained by the number of channels possible when using analogue broadcasting, and by the severe interference problems when adjacent transmitters are not well separated in frequency. That also explains why analogue broadcasting has had genuine difficulty in providing more than four universal channels. Not surprisingly, many of my constituents cannot receive Channel 5.
Many thousands in west Norfolk are affected: the borough council has estimated the figure to be as many as 20,000 households, which represents an audience of up to 51,000 people. My constituents are angry about this situation. More than 5,000 of them were sufficiently motivated to write to the King's Lynn Citizen to say so. All of them want something to be done so that they are able to watch their own regional television programmes.
In preparing for this debate, I have taken the time to check whether my constituents are alone in the importance that they attach to receiving the correct regional television programmes. The facts are interesting. Since 1970, the Independent Television Authority, the Independent Broadcasting Authority and, most recently, the Independent Television Commission have monitored public attitudes towards a number of broadcasting issues, in particular viewers' preferences for a range of programme types.
Over the past decade, news items have come right at the top of the list of programmes that viewers say they are most interested in seeing on television. Of crucial relevance to this debate is the fact that, since 1995, regional news has overtaken national news as the most popular of all programme types. Indeed, in the most recently available survey, 90 per cent. of the British public said that they wanted to see regional news: that is 30 per cent. more than those wanting to watch soap operas. It is not surprising that my constituents and those of other right hon. and hon. Members are up in arms, because the programmes that they most want to see are the very programmes denied to them.
We should also bear in mind the growing importance of community and regional identities in our everyday life. My constituents are served by a health authority, social services, education services, library services, police and fire services, all of which are administered on a county basis within Norfolk. The Government have, through the establishment of regional development agencies, made it clear that local identity within regions is increasingly important. Ministers are currently encouraging communities to become involved in the development of community safety strategies and local transport strategies, and they see a strong role for the community in developing policies on access to the countryside. Is there not a serious democratic deficit if people do not have access to news and information about their own communities via the most popular and effective medium?
Heacham, in my Norfolk constituency, provides a clear example. Heacham is a particularly large village which, in television terms, is cut off from its own region. Residents can receive only Yorkshire Television. It is common that local events, even those filmed in the village, cannot be seen on television by residents. Although Yorkshire Television, to its credit, includes some items from Norfolk, residents are understandably dissatisfied that the bulk of its regional news programmes focuses on issues in Yorkshire.
Last week, I gave the House a specific example of a reconstruction of a serious crime that took place in Heacham. It was broadcast on Anglia Television, but could not be seen by Heacham residents, who were the most likely witnesses. People in Heacham do not shop in Bradford, they are rarely in Leeds, and they are not particularly interested in the local goings-on in Grimsby. Like the majority of viewers around the country, they want to know what is going on under their noses in their own communities.

Mr. Brian Cotter: I am sure that the hon. Gentleman would be interested to know that people in my constituency, especially in an area called Bleadon Hill, cannot get the correct regional programmes, and can only get programmes in the Welsh language, which is difficult for them.

Dr. Turner: The hon. Gentleman's constituents must be even more cross than mine if they cannot even understand what they are hearing. As that intervention has shown, west Norfolk is far from alone in suffering from these problems. The Department for Culture, Media and Sport informs me that other affected communities are to be found in many parts of the country: in the Scottish borders, Fort William, all the border areas between Wales and England, parts of Yorkshire, such as Harrogate,


Richmond and Leeds, parts of Lincolnshire, Lancashire, the Wirral, Barnoldswick, Nottinghamshire, Wiltshire, the Swindon area, north-west Bristol, Devon, North Somerset and even some locations in London. The Library estimates that some 40 or 50 Members have constituents with cause for complaint.
Shortly after becoming a Member myself, I secured a short Adjournment debate dealing with the problems in North-West Norfolk. As a former engineer, I could sympathise with the real difficulties explained to me by the technical experts. There are myriad interference problems—as well as the need for our part of the country to be good neighbours with broadcasters in Europe. I am pleased to say that, following that debate, work commissioned by the Independent Television Commission and the BBC has identified scope for the addition of one more analogue relay in Heacham. I hope that that soon becomes a reality. I was glad to note that Heacham parish council had offered land for it. Nevertheless, although the relay will help everyone in Heacham, it appears that others elsewhere can be offered little help if solutions are limited to analogue broadcasting.
British television is now in the most significant period of change in its history following the arrival of digital broadcasting techniques. The new technology allows full use of modern computing techniques; it is also far more efficient than the analogue system with which we have grown up. Many more channels can be included in the same frequency space, and good reception can be achieved with transmitters working with anything from 10 per cent. down to 1 per cent. of the power levels used by analogue. The modulation techniques used are far less susceptible to interference problems between transmitters.
Digital television offers the possibility not only of introducing a range of new public and commercial services, but of eliminating anomalies in regional television coverage. This is a golden opportunity, and we must seize it.

Mr. Ted Rowlands: Twenty-five per cent. of all relay stations in the United Kingdom are in Wales. Unless the ITC has a programme for the diversion of those stations, digital terrestrial television will not reach millions of viewers, not only in Wales, but in the rest of the United Kingdom.

Dr. Turner: My hon. Friend will be pleased to learn that our objective can be achieved through the use of the larger number of channels available to digital terrestrial television to make simulcasting possible.

Mr. John Healey: My hon. Friend makes a persuasive case for the potential of digital television to solve some of the problems of regional broadcasting. Does he agree that digital television is the medium through which Government will be able to deliver a range of public services? Should not Government be considering questions relating to regulation and incentives for the securing of that public service access, while the ground rules for the new medium and its technologies are being established?

Dr. Turner: That is an excellent point, to which I shall refer later.
Simulcasting involves a transmitter delivering more than one regional variation. If the transmitter broadcasting Yorkshire Television to my constituents also broadcast Anglia Television, viewers could choose which to watch. Alternatively, solutions in some areas might involve a different deployment of transmitters and power levels. Engineers in the industry have confirmed that those possible solutions are entirely feasible. The options will be made immensely easier as and when analogue switch-off frees the spectrum.
Last month, the ITC reported the results of research showing that, even ahead of analogue switch-off, additional relay sites in the midlands and East Anglia alone would allow up to 1.3 million more people to receive digital services. It also reported that, through the use of a network of relays all operating at the same frequency, up to 400,000 people could receive digital broadcasts in the south Wales valleys. The ability to use single-frequency relay networks is a major advantage of digital broadcasting, and will offer even greater efficiency in the use of available frequencies.
In the past, genuine technical problems were the cause of our frustration. It is clear that, in the digital era, the fundamental issues are political and commercial rather than technical. If there is the will, there will be a way.

Mr. Michael Fabricant: The hon. Gentleman is right to highlight the problems, but may I caution him? He should not believe that there is an unlimited spectrum, especially in relation to digital terrestrial broadcasting.

Dr. Turner: The fact is that, through the use of modern compression techniques, we already have access to some five digital channels for every analogue channel. At present—without the release of the frequencies currently allocated to analogue television—we are looking at up to 30 channels. It will be for the people to decide, through Parliament, what use they want to make of those frequencies when they are freed up. I do not envisage all of them being used for our purpose, but I trust that some will be, for our problems are serious.
Parliament must be determined to insist on the highest possible levels of access, and on the right of people to receive their own regional broadcasts. We must also look after the interests of important minority groups. As a result of press coverage of this debate, the Royal National Institute for Deaf People approached me. It is campaigning for the Government to look again at the targets relating to the availability of subtitles for those with impaired hearing. I support its campaign; I also agree with my hon. Friend the Member for Wentworth (Mr. Healey) that we shall need to consider other public service issues. We need to clarify public policy and, if necessary, legislate. Under the current arrangements, we face the horrifying prospect that, even with up to 30 digital channels fully rolled out, many people in rural areas such as mine will still not be able to watch the very programmes that they most want to see.
During my campaign, I have spoken to a number of key players in the industry. Many would welcome early clarification of the way forward for digital television: clarification of the public interest constraints to be imposed and, in particular, clarification of the conditions for analogue switch-off—or, as some in the industry


prefer to call it, the switch from analogue to digital. Substantial investment is involved, and I think that the Government should face up to the issues as soon as possible to maximise the benefit that we can all obtain from the new technology. The industry, too, while defending its legitimate commercial interests, must become constructively involved.
The ITC tells me that it now aims to identify the criteria for the next phase of digital television expansion. It has also awarded a contract for a preliminary study of a digital-only terrestrial television frequency plan. In recent correspondence, it tells me:
We are taking very seriously the needs of different communities to be able to receive the appropriate regional service".
More ominously, however, it adds:
But we also have to understand and take into account the wide range of competing claims on limited spectrum.
What, then, are the priorities to be? How should they balance the need of our constituents to gain access to the programmes that they want to watch with the interest of commercial broadcasters to sell their programmes to as many of us as possible? I want Parliament to be fully involved in the early stages of the debate, helping to shape the ground rules rather than leaving Back Benchers to moan and whinge on behalf of their constituents when proposals have been finalised. My predecessor was fobbed off by statements that digital television did not provide a solution—not, I suggest, because of technical difficulties, but because the carve-up of the frequency spectrum had taken place without due regard for the needs of his constituents. I believe that my Digital Television Broadcasting Bill offers one way forward. In a recent survey in my constituency newsletter, 80 per cent. of respondents supported it, although it is clear that they are interested in the ends rather than the means.
The Minister has already shown considerable sympathy for the problems of my constituents, and has been generous with her time in discussing them with me; but can she promise that proper priority will be given to finding solutions rather than excuses, and will she now publicly confirm that the Government recognise the importance of addressing the issues early rather than later? Does she acknowledge that we have already waited too long?

Mr. Peter Atkinson: I congratulate the hon. Member for North-West Norfolk (Dr. Turner) on his debate, which is on an important and interesting subject. I was glad to hear him say that he had an engineering background, so that he could probably understand some of the complicated science surrounding the issue.
I speak in the debate because I have some constituents who cannot receive any television. As we move into the next millennium, some people do not have a television set. Although some of them have a video machine, they have to pay a BBC licence fee for it. Therefore, the first thing that I should like to achieve is a proper, complete build-out of relay stations, so that those who cannot receive even analogue stations may receive them.
I should like, secondly, to deal with the very real problem of digital television services. A large chunk of my constituency—like that of the hon. Member for North-West Norfolk—will not be able to receive any digital broadcasts until the analogue switch-off date.

Mr. Fabricant: Is my hon. Friend aware that the Culture, Media and Sport Committee pressed the Secretary of State for a date for analogue switch-off, but that he was unwilling to give one? It was thought that, by setting a date, there would be more rapid expansion of digital technology, to achieve the aims that my hon. Friend has set himself.

Mr. Atkinson: My hon. Friend has a point. However, an analogue switch-off will not occur for 10 or, probably, 15 years. Therefore, many of my constituents will not be able to receive digital television until then; and that would be quite wrong.
I was very pleased to note that the transmitting authorities have now agreed to increase the digital relay build-out to 81 transmitters. Nevertheless, considering the many hundreds of transmitters in the United Kingdom, that is very slow progress. If we are to reach 95 per cent. digital television coverage, a further 120 transmitters will require conversion or re-engineering. Therefore, it will cost vastly more to cover that 5 per cent. of the population than it did to cover the initial 90 per cent. Moreover, 5 per cent. of people—mostly in Scotland; some in my constituency and in other areas of the north Pennines; many in Wales and in Northern Ireland; bizarrely, some in Norfolk and Suffolk; and even some in Hove, in Sussex—will not be able to receive digital broadcasts until the Government do something about it.
The solution lies in making all services available on satellite. Clearly, it would be totally uneconomic to cover 100 per cent. of the country with relay transmitters to reach that final 5 per cent. of those who do not receive the transmissions. Satellite television is the only way of reaching them.

Mr. Phil Willis: Will the hon. Gentleman expand on his point on satellite, and does he agree that satellite broadcasters currently have absolutely no intention of broadcasting any regional programmes? Have they not, because of cost, totally ruled out broadcasting ITV regional programmes? Will he comment on that?

Mr. Atkinson: The hon. Gentleman has anticipated entirely what I shall say, but I entirely agree with him on the point. We shall get to a rump of people—5 per cent. of the population, but they number several million people—who will not be able to receive terrestrial digital television, which they will be able to receive only by satellite.
A well-known misunderstanding of the situation is that one must subscribe to Sky Digital to receive satellite television. One does not have to do that. I was rather grateful to the BBC for issuing recently a handy little leaflet that makes it absolutely clear that one can receive digital satellite broadcasts without subscribing to Sky. One may receive from satellite, free of charge, BBC 1, BBC 2, BBC Choice, BBC News 24, Channel 4, S4C, Channel 5, and even the Parliamentary Channel.


As the hon. Member for Harrogate and Knaresborough (Mr. Willis) said, one cannot receive ITV and ITV 2, because the ITV companies refuse to make their programmes available on the digital satellite platform. However, the BBC and others have set them an example, and I believe that, ultimately, they should follow it.
The difficulty is the competitive nature of commercial television, and the fact that ONdigital—the new digital terrestrial channel—is owned jointly by Carlton and Granada, which together own a vast chunk of the ITV network. They think that giving their programmes to satellite will give Sky a commercial advantage over them. I believe that the Government should intervene in that competitive battle, and I know that the Director General of Fair Trading is examining the matter. However, if that finding is not satisfactory, the ITV companies, in new regulations, should be made to make their programmes available to everyone, as Sky has to make its programmes available on terrestrial channels.

Mr. Rowlands: I understand, appreciate and support the burden of the hon. Gentleman's case. However, I think that most people still hope that relay stations will be converted to deliver digital terrestrial services to our constituents. I hope that he will support that, too.

Mr. Atkinson: I support it and, indeed, should like more relay stations to be built. However, economic reality dictates that that will not happen. It would cost enormous sums to get the next 120 transmitters operating, and entails the need to re-engineer hundreds more small relay stations serving a few people—which, because of spectrum problems, may not even be physically possible. I do not understand the nature of those problems, but have been told that they exist. I agree that there should be more conversions, but, for 5 per cent., they will not happen.
The problem has become more acute since the launch of ITV 2, and since ITV has done a deal for exclusive pay-per-view coverage of the Champions league football matches. For the first time ever, in some cases, those games will be shown on ITV 2. Therefore, even if viewers are prepared to pay to watch the matches, they will not be able to do so unless they are able to receive ITV 2 terrestrial transmissions. I think that that is wrong, and that, in denying people the opportunity of watching what they want, we are crossing a rubicon.
I await with interest the Minister's comments on the matter. It is very strange when one's children still do not know about "Neighbours" or "Home and Away": they live almost in a different—some might say better—world from the rest of us. Nevertheless, as we approach the 21st century, those of my constituents in Hexham who still cannot see any television should have the opportunity of seeing some of it. The majority of my constituents should have the opportunity of seeing digital television before the analogue switch-off.

Mr. Andrew Miller: I congratulate my hon. Friend the Member for North-West Norfolk (Dr. Turner) on initiating the debate, and on pursuing the interests of his constituents with such vigour. My hon. Friend the Member for Wirral, South (Mr. Chapman), too, has been working extremely hard in addressing the issue in the Wirral area.
The Wirral peninsula has a steep escarpment dipping down to the Dee valley. Consequently, many households are able to receive only television signals from Wales and from Wolverhampton. The accents in both those areas are somewhat foreign to the good folk of the Wirral peninsula. I therefore found myself agreeing with the intervention made by the hon. Member for Harrogate and Knaresborough (Mr. Willis). Although I perfectly respect and welcome the right to Welsh language broadcasting, it is a problem when it is being broadcast—under broadcasters' supposed public service obligations—to those who speak only English.

Mr. Rowlands: I appreciate my hon. Friend's point. However, as an ex-head boy of Wirral grammar school, I think that the two cultures should be able to get together.

Mr. Miller: I very much take that point. I certainly do not criticise spreading the Welsh culture—I welcome it; and there is a great deal of cross-fertilisation—but there is a huge language barrier. Broadcasting in another language is not an adequate response to broadcasters' public service obligations.
Moreover, it is inadequate to say that my constituents' regional needs are being met because they are able to receive regional television from Wolverhampton. There are plenty of examples—including the very good one of the village in the constituency of my hon. Friend the Member for North-West Norfolk—demonstrating that regional broadcasting is an important public service that cannot be provided either in another language or from a great distance.
The digital revolution gives us the opportunity to address those issues. However, if it is to do so, great flexibility, which broadcasters have not demonstrated in the analogue phase, will be required. They have always argued that there are problems with spectrum and difficulties with costs, but, technically, it is not an insoluble problem.
I invite my hon. Friend the Minister to get together with her ministerial colleagues in other Departments to try to find a solution. It is absurd that spectrum allocation is not the responsibility of one authority, and that it reflects historical rather than future requirements. For example, the Ministry of Defence could give up some of the allocation that was relevant to its needs 20 or 30 years ago, but is no longer necessary.
There should be a structured debate involving the Ministry of Defence, the Home Office, the Department for Culture, Media and Sport and the Department of Trade and Industry in the reallocation of spectrum. It would then be possible to say to companies that broadcast by satellite, digital terrestrial, cable or whatever, that if they wanted to bid for a slice of the action in a particular geographical area, they would have to provide a technical solution—possibly by buying in link services such as simulcasting—to make sure that everyone in the area could receive the service.
It is not asking a great deal and it will force broadcasters to work more closely with their counterparts, helping to overcome some of the issues concerning spectrum allocation. There are practical ways forward, but they require careful collaboration between the public and private sectors. If that happens, the digital revolution will present the opportunity that many of our constituents desire.

Mr. Phil Willis: I also congratulate the hon. Member for North-West Norfolk (Dr. Turner) on securing this morning's debate. I have nearly forgiven him for the nursery voucher issue. He has certainly done some sterling work on the issue that he raises today and he is to be congratulated on bringing it to the attention of the House so forcefully. My constituents are grateful to him and to the Government for the way in which they are responding. I am sure that in her reply to the debate, the Minister will support my glowing comments about the Government and say that they have addressed many of the issues, giving my constituents cause for hope in future.
The problems in Harrogate and Knaresborough are similar to those that have been mentioned by other hon. Members. They are not quite as bad as those in the constituency of my hon. Friend the Member for Weston-super-Mare (Mr. Cotter), where programmes are beamed in in Welsh. However, we do get them in Geordie, which has the same effect on many of my constituents—with apologies to the hon. Member for Hexham (Mr. Atkinson), who I am sure is quite fluent in that language.
We have two transmitters beaming into Harrogate and Knaresborough. One is in Bilsdale near Darlington, which is used by Tyne Tees Television and BBC Newcastle. The other is at Emley Moor near Huddersfield, which is used by Yorkshire Television and BBC Leeds. The quality of both those transmitters, which will be upgraded to digital early in the process, is absolutely excellent. Both signals can be picked up in my constituency, but there is a rub: unfortunately, people who want to watch Yorkshire Television and BBC Leeds cannot get the signal that they want; nor can those who want to watch Tyne Tees Television and BBC Newcastle. People living in the same street find it difficult to watch the station that they want.
In one block of flats in the centre of Harrogate, the bottom two floors can get BBC Newcastle and Tyne Tees Television, and the top two floors can get Yorkshire Television and BBC Leeds. The residents argue constantly and, of course, feel that their local Member of Parliament should resolve the problem by building them a transmitter. Half my constituency cannot receive signals from Emley Moor in Yorkshire and that causes a bigger problem.
Another issue that has not been raised this morning has become more prevalent lately. When people upgrade their televisions and videos they now have automatic tuning. I do not know whether other hon. Members have the same problem as I do, but since my son went to university, we are unable to change the tuning. Automatic television and video tuning picks up the best signal, but overriding it sometimes requires an engineer. Our new television apparently needs a new piece of circuitry to do that.
The question is whether all this actually matters. Harrogate and Knaresborough are synonymous with Yorkshire, as are the flowerbeds of Harrogate at Harlow Carr. It is a pity that Madam Speaker is not in the chair as only last year, she had a rose named after her in Harrogate. I commend it to hon. Members who do not have one in their gardens. Betty's Tea Rooms is also synonymous with Harrogate, as are the conference centre, the spa baths and the pump room. Knaresborough castle,

Mother Shipton's well, where hon. Members may wish to go and be petrified, and Nid gorge are all well-known Yorkshire landmarks.
Local people regard themselves as Yorkshire first and British second, and they aspire to being born and living in Yorkshire. Indeed, when my wife and I lived in Middlesbrough, we were expecting our second child and my wife rang up Yorkshire cricket club to find out whether the old boundaries of Yorkshire still applied and whether, if the baby was a boy, he would be able to play for Yorkshire. That is how strongly people feel about being from Yorkshire, about the Yorkshire region and, of course, about Yorkshire Television.

Mr. Miller: It has not helped their cricket club.

Mr. Willis: The hon. Gentleman refers to the finest cricket club in Great Britain, which is unbeaten this season. I am glad that the hon. Gentleman has given me the opportunity to praise our excellent side—I should add that I do so as a Lancastrian.
Many of my constituents agree that there is some excellent regional broadcasting and they want more of it. I found the statistics mentioned by the hon. Member for North-West Norfolk extremely interesting. I doubt whether people want more news, but they certainly want more regional programmes. They want to identify with their region and to know what is happening there. My constituents want to know what is happening in Yorkshire, not in Newcastle and Northumberland. They want to hear Yorkshire voices, not north-eastern ones. They want to see Yorkshire settings. They want Ceefax to provide Yorkshire regional information, not north-east regional information—another problem when they receive the wrong signal. They want to see advertisements for local Yorkshire products and companies with which they can identify.
Reference has been made to the regional development agency and the greater regional identity that is now developing. I totally agree. We want to see what the local RDA is doing, not the one in the north-east, which, of course, I am not decrying. That is not to say that Tyne Tees Television and BBC Newcastle do not make excellent programmes. In fact, the BBC in Leeds and Newcastle and the two ITV companies try to cover news in my constituency. They bend over backwards to do that. They co-operate and send each other's programmes down the line. Indeed, I am sure that the complaint from the constituents of the hon. Member for Hexham is that there is far too much regional news involving Harrogate, Knaresborough and North Yorkshire in the Newcastle broadcasts. The reverse is also true.
Some of the finest regional broadcasting in Britain is in my region. In fact, the Tyne Tees regional news programme "North East Tonight" has been shortlisted for the prestigious Royal Television Society national award for the third year running. That is quite an achievement for a regional news programme. "Calendar" is another programme with exceptional viewing figures, and the BBC's regional news programmes under the "Look North" title have larger viewing figures than the national news, as the hon. Member for North-West Norfolk noted.
What can we look forward to? Frankly, very little. Analogue broadcasting has 44 broadcast frequencies in use, and all are at their limits. There is simply insufficient


room for programme duplication without causing problems for viewers in other areas. There are 11,000 relay stations assisting with signals to overcome difficult topography. Harrogate in particular suffers from the fact that large hills obscure the signals from Bilsdale to the north and from Emley Moor to the south.
New transmitters could be installed, but the cost makes that unlikely, and the ITC refuses permission for new transmitters to be built, even when companies want to do so. Yorkshire Television offered to build a repeater transmitter in the Harrogate district to receive the signal from Emley Moor and pass it on. However, the ITC rejected the idea because the problem of overload would affect reception from the Bilsdale transmitter further north.
Despite the enthusiasm of the hon. Member for North-West Norfolk, it is unlikely that digital, provided through satellite and cable, will resolve all the problems. Far too many people—including, with respect, the hon. Gentleman—believe that digital will solve all the problems of regional broadcasting.
As I mentioned in my intervention in the contribution from the hon. Member for Hexham earlier, Sky Digital has no plans to broadcast any regional programme variations, yet the pictures available to many people in the country will come from satellite broadcasting. That is a really big issue. Sky Digital has no plans to duplicate ITV programmes because of the cost factor. At present, there are 27 regional and sub-regional services—Yorkshire alone has three sub-regional services—which would require 27 responders on the satellite. Neither Rupert Murdoch nor ITV sees much hope of recovering the costs involved through advertising. Indeed, I hope that the Minister will say what the Government plan with regard to satellite broadcasting, which is crucial for all our constituents.
Digital broadcasts from the existing masts at Emley Moor and Bilsdale will certainly improve the technical quality, but there is no guarantee that all problems caused by topography will be eliminated, and it is a misapprehension to believe otherwise. Some people will still not be able to receive the programmes that they want.
Digital through cable offers perhaps the best solution. It should be possible for viewers in Harrogate and Knaresborough to have a choice of at least two regional programmes, and for quality to be guaranteed. The challenge to the Minister and to the independent broadcasting commissions is to achieve that, so that people, especially those with cable, can select their preferred regional programme. Technically, through cable, it is possible for people in my area to pick up the south-west regional programme, but it is doubtful that companies will be obliged to offer such a range of programming.
The cable network will not reach every home within a reasonable time scale—if at all. I cannot get cable where I live. I am pretty sure that many hon. Members, especially those representing large rural areas, will discover that they were never going to get cable, as it was never going to be economically feasible for the companies to roll it out to those areas, and the companies are not required to do so. When the Government respond to the problem, it is, therefore, important that the needs of

everyone throughout the United Kingdom are taken into account. People should be offered a choice of service that guarantees them good-quality regional broadcasting.
It will be some years before every viewer has access to digital. There is a real concern that the analogue service will be downgraded in the period while digital takes over. When the Minister replies, I hope that she will assure the House that until analogue is switched off, the quality available on that service is maintained at the highest possible standard.

Mr. Ben Chapman: I begin by congratulating my hon. Friend the Member for North-West Norfolk (Dr. Turner) on securing this important debate, and on his comprehensive and distinguished presentation of his case. His speech enables other hon. Members to speak more briefly than we might otherwise have done, as he covered so many of the relevant angles. Therefore, I shall not touch on the technical issues—they are not my strong point anyway—as my hon. Friends the Members for North-West Norfolk and for Ellesmere Port and Neston (Mr. Miller) have dealt with them skilfully and eloquently. I shall concentrate on the way in which the problem affects the day-to-day lives of my constituents.
I came to the Wirral in 1990. I began campaigning on this matter as a private citizen before I entered Parliament, and have continued to campaign ever since. When I wrote to the television companies at the beginning of the decade about the problem, broadly speaking I was told that the companies' charter required them to cover about 95 per cent. of the population, and that my area belonged to the remaining 5 per cent. That was the end of that, as far as the companies were concerned.
That will not do. As has been explained, in the Wirral, we get our television from Wales and from the midlands. No matter how fond we are of those areas—and notwithstanding the distinguished connections with Wirral grammar school mentioned earlier—such programming is not relevant to people living in the peninsula. The problem is not new, and it gives rise to a heavy postbag. People in pubs and clubs constantly ask me about it. It may seem a frivolous matter, but it is far from that: it is important both to the community, and in terms of professional life.
Other hon. Members have described their areas' regional identities. The Wirral perceives itself, traditionally, as part of Cheshire, although formally it belongs to Merseyside. What it is not is part of the midlands or Wales.
It is not a question merely of wanting appropriate regional television coverage, but of needing it. There is the question of safety, for example. My constituency has many chemical plants—GATX and Lubrizol, for example, which handle chlorine and dioxins, and another chlorine plant at ICI Runcorn. There is also a nuclear facility at Capenhurst, in the constituency of my hon. Friend the Member for Ellesmere Port and Neston.
As an example, the Health and Safety Executive's guidance on the radiation emergency regulations requires news of emergencies to be relayed by television. People in my constituency—more than 2,000 could be affected—would not receive such warnings if they went out on


television covering the north-west. For example, many learned about the danger of polluted water only after the problem had been solved. That is not good enough.
The inability to receive appropriate television has other consequences, and regional news is an obvious case in point. People in my area want to hear the news as it affects their families and localities. We are interested in Cardiff and Wolverhampton, but not keenly. We want to know about the weather in our areas, not in someone else's: with great respect, it is not important to us that it is raining in Swansea or West Bromwich. When we watch football, we want to see Tranmere Rovers, Liverpool or Everton. Good though they are, Cardiff City and Birmingham City are not so important to us.
When my constituents travel to work through the Mersey tunnel, they want to know what weather will affect their journeys, and they are not particularly concerned about Machynlleth or Dudley. People want local traffic information, and local television programmes are a lifeline—a vital source of local information.
It is disorienting not to have regional services, and it may affect people professionally. Obviously, for example, it affects journalists if they cannot know what is going on around them. It affects politicians, too. I cannot see local political coverage—that is particularly distressing when I am on it! I could not see my own by-election on television, and that is ludicrous.
The lack of services may also affect builders. Watching television in the morning, they may not know whether they need to go to an indoor or outdoor working site because they are not seeing the right news and weather. One builder had a warehouse that burned down during the night, but he still turned up the morning because it had not been on the news.
The point is that this situation is ludicrous. To put it simplistically, people cannot understand how we can remotely repair a space probe on Mars, but not have appropriate regional television. I have raised the situation with the BBC, ITV and the Independent Television Commission at levels high and low, technical and policy. But I have made little progress, and less than my hon. Friends the Members for Pendle (Mr. Prentice), for Ellesmere Port and Neston and for North-West Norfolk.
Many issues surround any long-term solution. We may be able to consider coverage in the digital age when next we consider broadcasting legislation. However, there is a short-term problem, too. I receive many letters and complaints from people who feel that these problems have gone on far too long. Some constituents are considering withholding part of their licence fees. The idea of direct action does not sit comfortably with the burghers of Heswall and Gayton, and that is a measure of their frustration about a democratic deficit that disfranchises them. A television transmitter is clearly visible across the Dee, and people cannot understand why it cannot bring television coverage to them.
We must reconsider the priorities for the roll-out of television, whether for digital or for any future system. My constituents have tried all sorts of things—aerials 100 yd high, boosters and technical advice of all descriptions. None of it works. I make a simple cri de coeur on behalf of the people of the Wirral who think it is not too much to ask that they should receive appropriate regional television.

Mr. Christopher Fraser: I do not understand too much of the technical side of these issues, but I am a member of the Select Committee on Culture, Media and Sport, which has deliberated at length on broadcasting issues. Last year, we published a wide-ranging report on the multi-media revolution, many aspects of which the Government should carefully consider.
Many parts of my constituency cannot receive Channel 5, which is a great pity. Many parts of London also receive a poor range of services, and there is a major problem in terms of coverage across the country. The current digital revolution will have a profound effect on our society in many ways. The Government's intention, stated many times, is that, we should have an information-rich and socially inclusive society. However, I have enormous concern that, if the coverage of channels across the country remains as patchy as at present, the delivery of a full range of public services will not be received by all. That is a great pity.
As has been adequately articulated across the Chamber, regional broadcasting is vitally important to many communities, both urban and rural. Many people gain the information that they need every day of their lives to go about their business and undertake their social interests and tasks.
We live in a technological age—a digital age. We must first address the social implications of the issues of inclusion and exclusion that the debate begins to unfold. Chris Smith recently announced that he is to set up a regulators forum—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Perhaps I might remind the hon. Gentleman of the convention that we refer to, right hon. and hon. Members by their constituency titles, not by name.

Mr. Fraser: I beg your pardon, Mr. Deputy Speaker.
The Secretary of State for Culture, Media and Sport has recently announced that he will set up a regulators forum to improve co-operation between the regulatory bodies involved in broadcasting. It will include the Independent Television Commission, the Radio Authority, the Office of Telecommunications and the Broadcasting Standards Commission. Will that body be responsible for addressing the need for further transmitters to ensure that digital coverage is universally received, as against the current situation?
My hon. Friend the Member for Lichfield (Mr. Fabricant) has pointed out that we await the Government's announcement of a date for analogue switch-off so that the industry can better plan coverage. I mean not only industry organisations that deliver services, but those that produce sets and equipment. An awful lot of television sets are not compatible. My own is many years old, and I will take a lot of persuasion before changing it so that I know that I will receive a proper delivery of service.
Analogue switch-off has the potential for greater geographical coverage, but that potential can be fulfilled only with analogue switch-off, as the available power of the multiplexes is in danger of interfering with analogue television. The Select Committee report stated:
We consider that the issue of analogue switch-off should be taken forward not in isolation but in the wider context of the future of universal access.


I would be grateful for the Minister's comments on that point.
The Government must allow the digital industry to improve coverage so that in future, the 0.6 per cent. of homes that have never received any television can receive some at the quality and standard that should be received by all.
Finally, I want to make a plea for minority viewers, a subject referred to briefly by the hon. Member for North-West Norfolk (Dr. Turner). Their situation illustrates the issues relating to delivery of public services. Specifically, 1 plead for the Royal National Institute for Deaf People, with which I have communicated, and which has put its case extremely well.
The RNID is frustrated about Government action over subtitling and services from which those whom it represents may benefit. It suggests the implementation of a voluntary charter in consultation with broadcasters. The new digital programmers must subtitle only 5 per cent. of programmes in year one, rising to approximately 50 per cent. in year 10. Only 11 per cent. of programmes will be subtitled in 1999 on digital terrestrial television.
If our society is to be socially inclusive, allowing everyone equal access to the information that they need to go about their daily lives, in whatever circumstances, the current situation is inconsistent with that objective. Groups such as the deaf become more socially excluded rather than included.

Mr. Gordon Prentice: I shall be brief as many of the points that I intended to make have been adequately covered by hon. Members on both sides. I congratulate my hon. Friend the Member for North-West Norfolk (Dr. Turner) on the way in which he presented this matter, with which many of us have wrestled for years. Ever since I came to the House, I have battled with broadcasters to have regional anomalies between Lancashire and Yorkshire addressed. My pleas have fallen on deaf ears.
Left to themselves, the broadcasters will not act. It is, therefore, proper for us to address the matter in Parliament and to design rules and procedures that will force broadcasters to address the issues.
Why do anomalies in regional broadcasting matter? Ninety-nine per cent. of people watch television. Even in 1999, 300,000 people cannot receive terrestrial transmissions, but the overwhelming majority of the population watch television. Eighty-seven per cent. of people watch television at least once a day, and the most astonishing statistic of the lot is that the average person watches 25 hours of television a week. I do not believe that. The television may be on in the corner of the room, but the idea that most people are plonked there like gigantic couch potatoes watching television for the equivalent of more than one day a week beggars belief. I challenge that statistic.
What cannot be gainsaid is the fact that most people get their news and information from the broadcast media. That was the point made by my hon. Friend the Member for Wirral, South (Mr. Chapman).
We are still dependent on analogue; the audience is not yet fragmented, as it will be in 10, 15 or 20 years' time. However, not everyone will have access to the digital age. The Government must address that problem, and they are doing so.
The West Craven part of my constituency used to be in Yorkshire, until the Conservatives wrenched it out in the local government reorganisation of 1974. Many people there still feel an affinity with Yorkshire, which is reinforced when they pay their water bills to Yorkshire Water or their electricity bills to Yorkshire Electricity. Thanks to what the Conservatives did, Yorkshire Electricity may now be owned by Americans, but that identity and that sense of place is still important.
When my West Craven constituents switch on their televisions, they see Yorkshire Television. About 25 per cent. of my constituents never see me on regional television—[HON. MEMBERS: "Shame."] I am sure that that is a blessing in disguise. None the less, it implies a democratic deficit. Never mind about me; what about Liberal Democrat-controlled Pendle borough council, which is constantly vying with Labour-controlled Lancashire county council, and which smothers the area in "Focus" leaflets denouncing the county council for cutting back on winter gritting, for its education policies or for supposed cuts in the fire service? When people turn on their televisions, those concerns are not reflected. There is no comment about them and no analysis of the issues. That means a serious democratic deficit.
On 6 May, when I slump down in my armchair in the middle of the night after the local elections and switch on my television, 1 shall see the results from Scunthorpe and the rest of Lincolnshire, and from Leeds and North Yorkshire. I will not be able to see the results for the council that is coterminous with my parliamentary constituency.
The problem is about more than politics. There are, or could be, other serious consequences. In December 1996, there was an E. coli outbreak in West Craven, which struck down eight people. Fortunately, none of them died, but some were seriously ill. Granada and the BBC north-west region covered the story, but those programmes cannot be picked up in West Craven, the very area that the outbreak struck. Yorkshire Television did not cover the story because it considered that the outbreak was out of area. That is an extreme example of how regional anomalies can have a serious impact on a place.
What about the future for West Craven? We are not cabled. The way in which the previous Government drew up the licences, and the way in which companies were allowed to bid for the franchises, meant that they did not have to take into account rural or semi-rural areas. They did not have to take account of towns such as Barnoldswick, where I, along with 10,000 other people, live, or Skipton, over the border in Yorkshire—so cable is no solution.
We cannot get Channel 5 either. That is supposed to reach 70 per cent. of the population, but in Pendle, we shall be in the other 30 per cent. The digital revolution is now unfolding—the first digital transmission was in November last year—but we are not in that digital age. We are told that the 81 transmitters will reach 90 per cent. of the population. Last night, the Library staff helpfully dug out for me the Independent Television Commission's CD-ROM that prints out maps of the areas that will be


reached by digital broadcasts from the transmitters. There is Winter hill, the main transmitter in the north-west, and Pendle forest, a relay transmitter. The map makes it clear that on 17 May, when the switch is turned on, large areas of my constituency will not be able to pick up digital transmissions.
ONdigital is plastering the country with purple advertisements, but in large parts of my constituency, we cannot receive it, and there is nothing that ONdigital can do about that. I refer the Minister to her Department's document "Television: The Digital Future—A consultation document", which was published in February 1998. I do not think that the Government have yet made their proposals based on the consultation, but page 4 says about the reach of digital terrestrial:
The Government will be discussing with the Independent Television Commission and the BBC the spectrum planning of digital terrestrial television transmissions beyond the initial 81 sites to extend coverage into those areas unserved by the first stages of the terrestrial transmission network.
That is the key. I do not want my constituents, any more than people elsewhere in the country, to have to wait for the benefits of the new information age until analogue is switched off in another 10 or 15 years. There must be an early programme to ensure that areas such as mine, outside the big urban areas and forgotten by the broadcasters, get the benefits of the new technology just as people living in the big conurbations do.

Mr. Richard Spring: I warmly congratulate the hon. Member for North-West Norfolk (Dr. Turner) on securing the debate and on so comprehensively and directly addressing the important issues. I hope that the broadcasters will have listened carefully to the debate and will respond to the existing anomalies that the hon. Gentleman and many other hon. Members mentioned.
Given the power and influence of television, broadcasting is an important subject. In addition to its entertainment value, it is a source of information, bringing into the home vital up-to-the-minute news, current affairs, politics and weather forecasts—even if, as we have heard, some people get weather forecasts from other parts of the country.
Teletext services are also valuable, providing up-to-date information on an impressive array of subjects such as jobs, travel, accommodation, business news and share prices. They even provide lonely hearts columns.
Television has a role to play in increasing awareness of the arts, such as ballet and opera. It provides visual access to many sports, and performs an educative role in the form of the Open university and the BBC's "Learning Zone" broadcasts. It is especially important to the elderly, the infirm and the housebound. It now dominates all other media.
That said, we are undergoing a broadcasting revolution that may soon make existing technology appear crude and old-fashioned. That revolution means that broadcasting is one of the biggest growth sectors of the age, creating many opportunities and jobs. The most exciting thing about the revolution, which was started by the previous Government, is that the United Kingdom is leading the world. We are the first country to have digital terrestrial television. Industry sources have noted the number of

visitors coming from abroad to seek advice. Sky and ONdigital have impressive initial subscriber numbers, and it is fitting that the nation that gave the world television should be in the driving seat, leading the way in television's digital revolution. I pay tribute to my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley) for bringing in the Broadcasting Act 1996, which created the environment in which the digital revolution has expanded and become such an enormous success story. As a consequence of the Act, which reflected so much foresight, Britain leads the way.
Digital television is available in two formats, terrestrial and satellite, with a third—cable—to be launched early in the next millennium. That diversity will not only bring genuine choice to consumers but create healthy competition, which can force prices down. It is certainly in the interests of all to ensure that competition continues to extend throughout the industry. The fact that we are only at the beginning of this new technological era leads one to consider whether we are better advised to intervene now and risk unintended consequences or to allow things to sort themselves out naturally, perhaps taking action on analogue switch-off once things have become clearer. To echo my hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser), will the Minister announce a firm date for switch-off, or will it be subject to the take-up of the new technology? Independent analysts predict about 24 million subscribers by 2008, a number many think too low to warrant the shut-down of analogue services.
The regional anomalies in television broadcasting were ably highlighted by many hon. Members. I know that my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) shares many of the concerns of the hon. Member for North-West Norfolk about coverage in her constituency. The present analogue system boasts 99.4 per cent. coverage of United Kingdom households. That means that fewer than 1 per cent. of households cannot receive a television signal. Some communities in remote areas are deprived of the benefits of television, as my hon. Friend the Member for Hexham (Mr. Atkinson) noted. It is desirable that digital television should provide at least that level of coverage, or, at best, universal coverage. It will be interesting to hear the Minister's view on that.
I welcome the Minister's recent comments outside the House that digital needs to be inclusive of all members of society and that we should ensure that we maximise the potential for digital to increase its accessibility. If we are serious about embracing digital technology, it must be accessible to all. Digital broadcasting is in its infancy. We have heard about the considerable difficulties in extending the desired coverage in mid-Wales, northern England, Scotland and elsewhere. For various reasons, fully 30 per cent. of households cannot have a satellite dish. Cable television is available to only 43 per cent. of households, and digital will not be available on that platform until after 2000. More encouragingly, it is estimated that digital terrestrial television will be available to 93 per cent. of households by February 2000. That growth was mentioned by my hon. Friend the Member for Lichfield (Mr. Fabricant) last week in the House. Those matters must be considered to ensure that no long-term problems arise on the coverage front.


The hon. Member for North-West Norfolk noted an anomaly in his constituency and referred to a serious assault in Heacham. It was extraordinary that the television reconstruction was seen by 750,000 people but not by those who live in and around the area of the crime.
The switch from analogue to digital has potential problems of its own. If it is decided that the switch should be phased in region by region, it may lead to disputes about boundaries, possibly creating a disincentive for take-up in areas known to be down the line. As the hon. Member for North-West Norfolk said, the introduction of digital television presents a theoretically golden opportunity to iron out regional anomalies. However, given the huge technological changes envisaged in the next few years, people are concerned about several aspects, such as transmission to difficult locations.
What will be done to ensure that coverage reaches at least the 99.4 per cent. achieved by analogue transmission? Will the market be enough for that, or is Government intervention necessary? If so, when should such action be taken? Should digital be phased in regionally, or is the big-bang approach best? Are regulations to bring about standardised, inter-operable equipment advisable or necessary? Those are only some of the many questions that need to be addressed.
The hon. Member for North-West Norfolk and my hon. Friend the Member for Mid-Dorset and North Poole mentioned the anomaly that affects the deaf. As the Royal National Institute for Deaf People has told us, the low subtitling targets required of digital terrestrial broadcasters mean that people who are deaf or hard of hearing are effectively excluded from the digital revolution and all its benefits. New digital programme providers must subtitle only 5 per cent. of their programmes in year 1, rising to 50 per cent. in year 10. When averaged with the analogue simulcast targets, that brings the overall accessible output for hearing-impaired people to only 11 per cent. this year. With many more digital channels expected, that number is unlikely to improve. I shall write to the Minister to express my concerns in more detail. I feel sure that she will want to reflect on the problems of people with hearing difficulties.
The potential benefits of digitisation are immense. We should do all in our power to ensure that we have the most competitive possible marketplace to drive standards up and prices down and, we hope, to alleviate the regional anomalies described in this debate. However, I believe that it would not be correct to intervene in the digital marketplace now. Irrespective of how well meaning and admirable the desired outcomes of an intervention might be, there is a distinct possibility that the actual outcomes would be different. The Opposition believe that it would be better to allow expansion to take place as naturally as possible. It would be a great shame to act now and risk unduly hindering this complex technological revolution and the huge benefits that it can undoubtedly deliver.
In this process, I hope that coverage anomalies will be tackled. I urge the Independent Television Commission and the broadcasters to keep the issue firmly in their sights as a major concern, and the Government to hear what has been said this morning and to remind the broadcasters of what is at stake.

The Minister for Tourism, Film and Broadcasting (Janet Anderson): I sincerely congratulate my hon. Friend the Member for North-West Norfolk (Dr. Turner) on securing the debate and on introducing his ten-minute Bill the other day. The debate and the Bill address what is an important issue for many of our constituents. I thank him particularly because the subject is one that people often avoid; they feel that its technicalities are difficult. They are indeed complex, but, at the end of the day, it comes down to one thing: a better service for our constituents. We hope that a service can be extended to those who are unfortunate enough to be unable to receive it at present.
My hon. Friend and other hon. Members have pointed out how much people like to watch their own regional news. It is rather ironic that, at a time when we are seeing the growth of community television channels and when we are doing everything possible, through the regional development agencies and so on, to encourage people to develop regional identity, too many people are still unable to receive their regional television news.
The hon. Member for Hexham (Mr. Atkinson) pointed out that some of his constituents could not receive television signals at all. I did not realise that that was still the case, even though I know Hexham well—I was born in Newcastle, just down the road. I welcome his reference to the helpful BBC leaflet that explains that it is possible to receive satellite television without subscribing to Sky. That is a welcome development from the BBC.
My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) said that his constituents could receive only Welsh news from Wales and Wolverhampton. That problem is not technically insoluble. As he helpfully suggests, I shall talk to some of my colleagues in other Departments to find out what can be done to release spectrum.
The hon. Member for Harrogate and Knaresborough (Mr. Willis) complained that some of his constituents could receive only Geordie news. if he wants a translation, perhaps I could provide one. The hon. Gentleman referred to cricket in Lancashire and Yorkshire; I shall not dwell on that matter for too long, but I do not know whether he has noticed that Mr. Deputy Speaker is wearing a Yorkshire county cricket club tie—that is most appropriate for this debate.
My hon. Friend the Member for Wirral, South (Mr. Chapman) told us that he had been campaigning on this issue ever since he became a Member of Parliament. We know that, and I pay tribute to him for the way in which he has never lost an opportunity to present the concerns of his constituents. I very much agree with him that the subject of this debate is not a frivolous one. I was especially interested in what he said about the safety aspects: he pointed out that there are chemical plants and a nuclear facility in his area but that, often, people could not receive news about emergencies at those plants. That is extremely worrying. He also pointed out that he could not even watch coverage of his own by-election.
The hon. Member for Mid-Dorset and North Poole (Mr. Fraser) made an important point about social exclusion. Television can contribute towards including people throughout society. We are considering that matter. He also mentioned fact that my right hon. Friend the Secretary of State wanted to bring together a regulators


forum. We are considering that matter in the Department. The hon. Gentleman made the helpful suggestion that such a forum could investigate regional anomalies. He referred to the report of the Select Committee on Culture, Media and Sport; we always take particular notice of what is said by his and my colleagues on that Committee.
My hon. Friend the Member for Pendle (Mr. Prentice) probably summed up the matter when he said that the broadcasters will not act if they are left to themselves. I hope that that will not be the case, but I suspect that it might be true. Any pressure that can be exerted by Parliament will certainly be most welcome. The issue is important and we should not allow it to go away.
It is most welcome that the hon. Member for West Suffolk (Mr. Spring) so often agrees with us on these issues. I am delighted to hear that he and his colleagues agree with our evolutionary approach to what is happening in broadcasting. We believe that it is wise to allow the expansion to take place before the Government take action. It would be a huge error to do something only to find, six months later, that we had done the wrong thing.
The delivery of the correct regional services was an important issue in the planning of the analogue transmitter network. Nevertheless, we recognise that there are still a number of areas in the UK where consumers do not have access to television transmissions that carry programmes from the correct region. To date, the priority of the BBC, the Independent Television Commission and the Government has been to ensure that as many people in the UK as possible can receive a service. Sadly, it has not been a priority to improve coverage of the correct regional variations.
Many hon. Members have referred to the problems of the hard of hearing and those with sensory disabilities. I reassure the House that we have held discussions with the Royal National Institute for Deaf People about that, and I am today writing to the broadcasters to ask them what they are doing to encourage the development of digital services. In particular, we shall point out the need for more subtitling on television. We shall also refer to the problem of regional anomalies.
I understand the argument that digital technology, which increases the number of television services that can be broadcast, should enable regional anomalies to be corrected. Certainly, digital compression techniques do enable a number of services to be carried on a single multiplex, transmitted on one frequency channel. In the future, those techniques may be refined further so that the number of services transmitted at any one time can be increased.
The Government recognise the importance of providing the correct regional services, wherever possible. While analogue transmissions continue, it is unlikely that additional frequency channels could be found to use digital television transmission to rectify regional anomalies. However, we have asked the broadcasters to take into account the possibility of resolving such anomalies in future planning exercises and we shall continue to do so.
The Government want to encourage early and widespread access to the benefits offered by new digital technology. An announcement of a date for the switch-over from analogue to digital transmission will be an important driver in the take-up and success of digital television. The Government want to announce a switch-over date as soon as possible; that will be done as soon as is practicable. However, we are keen to ensure that the date we give is announced with sufficient certainty to give industry and consumers confidence in making their investment and purchasing decisions. That can be done only on the basis of a properly considered strategy, set against the background of actual digital services that are winning public acceptance.
My hon. Friend the Member for Pendle referred to a consultation paper, which we published in February 1998, entitled "Television: The Digital Future". That document dealt with the ways in which digital television and its benefits could best be introduced throughout the UK and how the switch from analogue to digital services could take place. We are now considering the responses to that consultation paper. A significant number were in favour of a Government announcement, within two years, of either a firm date or a target date. A significant body of opinion also favoured the timing of the announcement being based on criteria being met—for example, that of 50 per cent. penetration of digital services, or of near-universal penetration of digital services. Again, I thank my hon. Friend the Member for North-West Norfolk for introducing his ten-minute Bill, which made such a valuable contribution in encouraging the debate.
A co-ordinated planning exercise will be needed to assess the various issues that the switch-over to digital transmission will raise. One of those issues will be the priority to be given to resolving regional reception anomalies. Work on that is already in hand, and I can tell the House that we expect to say more on that matter before the summer recess.
I conclude by thanking everyone who has contributed to this important debate. For far too long, people have been reluctant to address this issue. The debate is a most welcome contribution and, like the hon. Member for West Suffolk, I hope that the broadcasters are listening.

Early Years Education

11 am

Mrs. Caroline Spelman: I am pleased to be granted the opportunity to introduce this debate on early years education; the subject is very close to my heart, as I have three children who fall into that category.
We need to define what we mean by early years education—there is some confusion as to the age group that is covered by that phrase. I asked the headmistress of my children's local school, whose authority on such matters I always respect. She told me that it was internationally accepted that early years education covered children up to the age of eight. I was rather pleased to hear that because, although I am not a professionally trained teacher, that is the age group of which I have direct experience. That experience has been accumulated in several different locations: the nature of political work is such that one moves around a lot, first as a candidate and then as a Member of Parliament to one's constituency; and because early years education provision varies around the country, I have had a chance to experience several different systems.
Above all, I am anxious that today's debate should focus on the quality of early years education and that the needs of the child should be paramount in our discussion. By the end of the debate, we should have a better idea of what we mean by "quality" and be working on ways to achieve that quality for all children. Key to the provision of early years education are the people who look after the children. Children need to attach themselves to someone—the jargon refers to such people as "key workers"—but the parent's understanding of their role is rather different from the child's. The first time a mother takes her young child to a place providing early years education, it is a wrench to leave that child for two and a half hours; usually a few tears are shed, and not only by the child.
It is essential that both parent and child trust the worker who is to take care of the child. Trust develops over time, and the authority, ideas and values conveyed by that other adult become important to the child's family and then to the community in which the early years provision is located. I am sure that other parents will be able to identify with what authority their child comes home and says, "But Mummy, Mrs. McKay said today that we must do such and such." That shows the influence that that key person can exert.
If there is turnover in staff, or if staff are of inadequate quality, that can be extremely unsettling for a child, so the quality of personnel is an essential consideration. We have to decide what should be the minimum qualifications for those working in early years education. What sort of training should they receive, and who will manage and monitor that? We must also consider the issue of child protection. Unfortunately, we have become more aware of how vulnerable children are in all sorts of educational settings, so adequate thought must be given to protecting them.
The second key element of quality is the environment. That extends beyond the basic requirements of the environment being clean, safe and warm; it must be appropriate to the age group of children. I was concerned by the report of Her Majesty's chief inspector of schools which identified several early years environments that

were inadequate: for example, 14 per cent. had no outdoor play area. As all parents know, as well as learning, children of the ages covered by early years provision need to let off steam. If there is no outdoor facility, that environment is not appropriate to the age group.
Another key element in quality is close examination of our real objectives in providing early years education. Is it primarily for the benefit of the child, or are our objectives mixed? If we have the child's interest most at heart, we need to be realistic about the amount of time that children spend in early years education. Pre-schoolers often cannot cope with more than two or three hours per day, and they are very tired at the end of that educational experience. A child of statutory school age typically copes with a six and a half hour school day. However, if our hidden agenda is to provide more early years education so as to help more women back into work, the child's day easily becomes extended to nine hours or more, and children have difficulty coping with long periods spent outside the home.
The working day conforms to typical shop or office hours, and so extends beyond the school day. That presents us with a dilemma. I fear that there is a real danger of young children becoming institutionalised when they are in supervised educational environments for up to 12 hours each day, often throughout school holidays, because working parents are typically allowed four weeks annual leave, whereas school holidays extend well beyond that period.

Mrs. Anne Campbell: Does the hon. Lady recognise that it is important to give parents the opportunity to work part-time, if that is their preference? Does she agree that a great step in that direction will be achieved by the introduction of the working families tax credit and child care tax credit, which the Government intend to introduce in the autumn? Those are policies which the Conservatives are opposing; how can the hon. Lady oppose them when it is of such advantage to parents to be able to work part-time?

Mrs. Spelman: I shall come to the WFTC later. Part-time working is more compatible with school provision, but part-time workers often find that their leave is not concordant with school holidays, which leaves us with the problem of children tending to become institutionalised. Children need to learn at home as well.

Mr. Graham Brady: Would my hon. Friend care to comment on the fact that the real growth in part-time working happened during the 1980s and early 1990s? At that time, Labour Members did not consider part-time jobs to be proper jobs, but now they are in government, and part-time work is the only form of employment that is growing, they think it is most important to encourage that sort of employment.

Mrs. Spelman: I agree and 1 thank my hon. Friend for his intervention, because it gives me an opportunity to nail a myth. The growth in early years education is not the invention of any one political party; it reflects changing practice in the workplace, not only in this country, but throughout the western world. Twenty years ago, far fewer women wanted to go out to work when their children were in the early years category, but with wider educational and employment opportunities for women has


come a greater desire to do so. I should not like the debate, which should focus on the needs of the child, to be diverted by false claims of victory in matters of employment.

Mr. Bernard Jenkin: May I draw my hon. Friend's attention to the damage that is being done to existing nursery school provision by additional regulations? I have received a letter from a playgroup in Wivenhoe in my constituency; it is a charitable institution which receives voluntary help. Its pupils are being siphoned off—in some cases unnecessarily—into the new early years education provision in state schools; and the Government's minimum wage legislation is having a damaging effect on its financial viability, as is the requirement for three weeks paid leave, rising to four, and the need to pay higher national insurance contributions on wages in excess of £105 a week. Those damaging measures have forced the playgroup to move to cheaper premises and to cut staff—is it Government policy to do that?

Mrs. Spelman: I thank my hon. Friend for that intervention; he will find that later parts of my speech deal with those issues, but he has provided another example of the problem. The phenomenon he describes is not confined to one part of the country, but is widespread.
I am concerned that increasing the number of hours of early years provision should not be detrimental to the needs of young children. The needs of many young, often single, parents may also be properly catered for by stability and security of provision throughout the early years. Whether they are young, old, single or married, all parents of young children need support, advice and encouragement. Parent evenings offer invaluable opportunities to get an angle on how to handle one's own child, but, sadly, not all parents take that opportunity. I am worried about the Government undermining parental and family support through the child care tax credit, because it can only be used for paid, registered child care, which means that there is little practical support when other family members and much-loved informal carers care for young children.
There is a debate about what quality means and what children are being taught at this stage in their education. Adults often think of easily quantifiable goals such as the age at which a child learns to read, write or count. We have forgotten how much we learned informally as young children through creative play, experiments and games. I draw the Minister's attention to an article that appeared in Nursery World on 8 April this year which compares and contrasts the Scottish system with the English early years curriculum. Approaching the issue from the child's angle, it asks: would a child prefer an adult who creates opportunity for play, improves communication and stimulates his or her interest in a happy environment, or would a child rather be with adults who have goals that will establish expectations for him or her based on what most children can do by the end of the reception year? I was horrified to read that, according to the Government's consultation document about early learning goals, my four-year-old might be expected to:
form sentences sometimes using punctuation.
What if he cannot do that? Does it mean that he will be labelled a failure at age four? It is extraordinary that that should be considered a "desirable outcome".
Those goals do not cater for children who are disadvantaged by the fact that English is not their first language or who have a learning difficulty. Boys and girls make different developmental progress. I have children of both sexes and I have seen how four-year-old boys take a different approach to learning. It is interesting to watch the way in which girls settle into a nursery setting, interact with each other, take out their books and get on with it while the chaps tumble around on the floor.
There is also the question of the range of early years education, to which some hon. Members have alluded already. There is no doubt that parents have demanded more early years provision. I am astonished by the range and quality of early years education in this country. When I moved to my constituency of Meriden, I was surprised by the level of nursery provision available throughout the Solihull borough. I freely admit that the nursery vouchers scheme proposed by the previous Conservative Government was wholly inappropriate for that borough—but I do not want to be distracted into a discussion about how successful that was not.
The fact is that there is a high level of state provision in my borough, which aims to ensure total provision for all three-year-olds by 2000. However, I also observe that private provision is struggling to compete and that parental choice is diminishing. Two nurseries in my constituency that will have to close this year have approached me. Both nurseries predate the establishment of the state nursery that is attached to the local primary school, and one of them has been around for about 40 years. In that case, mothers got together and provided playgroup-nursery support in order to meet local demand in the community. The nursery is situated in the local church hall and is an important economic link for that church.
Two things have happened to nurseries in my area. First, the creation of the state nursery has encouraged parents to take up places there because they are afraid that they may otherwise not secure reception places. There is no better place than this House to speak the truth about what is happening in the community and the subtle constraints being placed upon choice.

Mr. John Hayes: The other side of that coin is that the space allocated to nurseries within primary schools is preventing expansion and development for older children. That is happening in my constituency. The spin-off is that popular schools have less room to expand their facilities for older children because they are offering nursery provision that is already locally established in the private sector.

Mrs. Spelman: My hon. Friend makes a valid point. The schools in my area that have expanded to provide state nursery education are stretched for space for other ages.
As my hon. Friend the Member for North Essex (Mr. Jenkin) said, the Government's new employment legislation has compounded the strangulation of private provision. The people who run the two nurseries in my constituency that are to close have cited specifically the effect of the introduction of the minimum wage upon the economics of their operations. When they approached me, they were unaware that, under minimum wage legislation, they would be required to pay maternity and annual leave.


They were horrified that their small establishments—which grew out of ad hoc arrangements and are supported in the community—would be knocked sideways by that heavy-handed employment legislation.
That pattern is replicated up and down the country. The Pre-School Learning Alliance calculates that about 1,700 pre-schools are threatened with closure this year in addition to the 1,500 that closed in 1997 and 1998. The Department for Education and Employment disputes those figures, but its claim of a net loss of 100 playgroups is definitely flawed as it is based on social services statistics, which include changes of name, ownership and address. We must approach closure statistics with caution.

Mr. Ian Bruce: Many mums who help with playgroups are volunteers and are pleased to receive about £8 for a 4-hour session to help with their own costs. Is it not ridiculous to rule that those mothers must be paid £3.60 an hour or work for nothing when the old arrangements worked sensibly? That must be an unintended consequence of the Government's minimum wage legislation.

Mrs. Spelman: I thank my hon. Friend for that intervention. He makes my point precisely: it is wholly inappropriate to talk in ideological language about poverty pay in nurseries when, in reality, there is often a high level of volunteer and parental involvement in those operations. Parents have been happy to be involved in that way to date and they are greatly disappointed to see that heavy-handed legislation eroding their achievements over the years in providing a service to the local community.
Real partnerships can be achieved without that sort of heavy-handedness and strangulation by state nurseries. My children attend Knowle Church of England primary school whose site also comprises a private day nursery, Early Birds, which offers nursery provision and a wrap-around service. Continuity for children is provided on the same site. I urge the Government to recognise that it is possible for private and state provision to co-exist happily in a real partnership. It is a symbiotic relationship that allows parents a real choice.
So that the Minister's response is not distracted by a sterile ideological debate about employment law and its application in this area, let us return to the key question: what is quality in early years education? What should the minimum standard be and what target should we set for premium provision in early years? How can we ensure that the poorest areas do not suffer from the poorest provision? How do we deliver quality early years education across the board? Above all, how can we ensure that we get it right for our children? To fail them in this endeavour would be to deprive them of the full glory of childhood—and our generation would have an awful lot to answer for if that happened. That is why I have initiated this debate.

Jacqui Smith: I thank the hon. Member for Meriden (Mrs. Spelman) for securing the debate on an issue that we all agree is important and I am grateful to have the opportunity to contribute to it. The Government have already made significant commitments to, and progress in, the provision of early years education, and I shall refer to that later in my speech.
I agree with the hon. Member for Meriden that the quality of educational provision for young children is important and that one factor that determines that quality is the stability of the staff and the key workers with whom they come into contact. There is a conflict between aiming to achieve that objective, and refusing to accept that it might be necessary for staff to receive decent levels of pay and training. The minimum wage is a way of ensuring a reduction in labour turnover not only in child care provision but in all small businesses. It ensures precisely the stability that is necessary to provide high-quality child care.

Mr. Hayes: Surely the logic of the hon. Lady's argument would write off a whole range of community initiatives and voluntary and charitable work. If, as she is saying, quality and continuity can be provided only by professional staff, that would put an end to a range of activities, not only in education but many other areas of life, which are provided in my constituency and, I am sure, in hers.

Jacqui Smith: I certainly was not arguing that quality depends only on a professional input. Of course, it depends on good volunteers, but there is a slight irony in saying that we need to maintain stability and continuity of employment, but that we are not willing to underpin that aim with a minimum wage, which, as experience in other countries has revealed, helps to reduce labour turnover.

Mr. Ian Bruce: I am sure that the hon. Lady will agree that to pay a professionally qualified teacher £3.60 an hour would be an insult. Conservative Members are not suggesting that it is right to take on professional people at that rate, but surely the minimum wage is not aimed at such people. It is suitable for people who are willing to volunteer to work in organisations that have money to help with the expenses that such volunteers incur by driving to the place of work and, perhaps, putting their own children into child care. What is wrong with those people being paid an £8 allowance for working in such places or being able to volunteer their services for free? Surely the hon. Lady can determine the difference between what we are asking for and the Government's rigid minimum wage legislation.

Jacqui Smith: As a member of the National Union of Teachers, I do not think that £3.60 an hour is an appropriate rate for a teacher. However, pay of less than £3.60 an hour is not appropriate for people whom we trust to care for and develop our children. That is the significant point.

Mr. Jenkin: Will the hon. Lady give way?

Jacqui Smith: No, I want to move on.
As the hon. Member for Meriden said, the issues connected with early years education range much wider than the minimum wage and employment legislation, although they have an important contribution to make. I declare an interest as the mother of a five-year-old and a child of 10 months. Two years ago, my family was lucky in that my son was able to attend the nursery class in a local primary school. Like many parents, we sent him there because we wanted him to have the opportunities


offered by high-quality early years education. Those include the chance to meet and play with other children; the opportunity to experience a range of stimulating, fun play and learning activities; the opportunity to learn how to work in a group; the chance to talk, listen and develop concentration, and the chance to learn how to share, or not, as the case may be. That high-quality early years education provides not only a social introduction to school but the early foundations for literacy and numeracy that are so important for raising standards later in children's school life and beyond.
Like the hon. Member for Meriden, I welcome the opportunity to discuss my child's progress with qualified staff. Anyone who has experienced a parents' evening knows the slight trepidation that one feels when one arrives at the school to talk about the child's progress, but it is crucial to have an early analysis of children's strengths or special needs because that can provide an early indicator of support that is needed or even just ideas for talking to and playing with them. I agreed with the hon. Lady when she stressed the importance of the parents' role. I am not an expert in colouring with pencils, cutting out and other activities that are important for children. I welcome the expertise offered by the nursery class that my son attended and in his present primary school which gave me ideas about what to do with my children.
The other day, I was particularly pleased to visit Hollyoakes Field first school in my constituency. That runs a good project, according to which parents are invited into the classroom to work with teachers and benefit from those ideas for developing play and learning opportunities outside the classroom. We want to develop more of those initiatives that involve parents.
I recognise, from my experience, the advantages of early years education, but for my child such provision was piecemeal. What children received was determined by luck, one's ability to travel and often, most significantly, by one's ability to pay for quality nursery care. I recognise the important role played by private providers, but we should have learned from the past the lesson that parental choice cannot be delivered simply by allowing a free market to exist without planning and coherence in provision.
That was particularly the case under the former Hereford and Worcester county council when it had a Conservative administration. The council provided itself a low-cost education service and viewed nursery and early years education as a frill which could be dispensed with to keep costs down. My family benefited from the Labour and Liberal Democrat administration that took over the council, which succeeded in increasing the number of nursery classes and realised the importance of that provision for children's long-term success. Despite the improvements made by that administration during the 1990s, the authority continued to be hampered by a lack of political and financial support from national Government and, most significantly, a lack of a coherent strategy across the range of providers of nursery and early years education. That lack of co-ordination was, of course, exacerbated by the introduction of the nursery vouchers scheme.
It might be worth while reminding ourselves, as a contrast to the present situation, what happened under the nursery vouchers scheme. It managed to combine the worst disadvantages of a completely free market—lack of

planning, no entitlement to, or equality of access and no certainty of supply—with a bureaucracy that left parents gasping and taxpayers footing the bill. I welcome the Government's quick action to establish early years development partnerships and plans. It is clear from experience that we can achieve a coherent system only if we involve all providers, public and private; local authority social services, as well as education services, and employers, training and enterprise councils and parents.

Mr. Brady: Does the hon. Lady accept that one of the main criticisms of the nursery vouchers scheme was that it encouraged schools to take children into reception classes, which was inappropriate? Does she accept also that it is unfortunate that that trend has not stopped following the ending of the vouchers scheme? Would she care to comment on that?

Jacqui Smith: There is a slight irony in the Opposition arguing for parental choice while suggesting that there are press gangs of reception class teachers wandering around towns, grabbing unsuspecting children into their classes. Conservative Members cannot argue both for parental choice and that there should not be broad provision. I accept the—

Mr. Brady: Will the hon. Lady give way?

Jacqui Smith: No; I shall make progress.
I accept that there needs to be a choice—which the nursery voucher scheme certainly did not deliver. To deliver that choice, all the providers—public and private—must work together.
The Government undoubtedly set a tough task in the preparation of early years development plans. I accept that providers that had become used to competing have not always found it easy to work together. Before planning, one needs to know what provision already exists. The new system introduced tight time scales. The Government—in my view, rightly—put the responsibility on the early years development partnerships to consider not just provision but special educational needs, equal opportunities, training and quality assurance.
Locally, at the start of the process, people expressed some concerns to me, but they took on the challenge. In Worcestershire, they have already delivered a free place for every four-year-old and they are working to fulfil the Government's target of providing free, good-quality early education places to 66 per cent. of three-year-olds by April 2002.
The development partnership and the local education authority have appointed an early years development officer. They have formed mentor-teacher teams to support good practice in a full range of settings, in recognition of the need for quality provision and the challenges of developing learning opportunities for younger children.
There has been some concern about the learning experiences of young children, especially in reception classes. The very fact that we are holding this debate recognises the huge expansion in early years provision that has already taken place and the proposed even bigger expansion in it. It is a luxury that we did not have under the previous Government, because at the time not many


children benefited from that type of education, so we did not need to discuss it. Nevertheless, it is important, and I know from first-hand experience that some excellent work has gone on in reception classes with young four-year-olds.
Much of the debate has centred on a false distinction drawn between formal education and other nursery education. Being in a primary school does not necessarily or automatically imply a style of learning, just as being in a nursery or playgroup does not. What matters is what teachers and other staff actually do with the children.
Now that the system is developing, there is an important job to do. Unlike the hon. Member for Meriden, I believe that it is important to clarify desirable learning outcomes, not because we want to regiment children or stipulate that all children must have achieved a certain standard, or because we want to declare them to be failures, but because it is increasingly important, in such a developing area, that we consider good practice, not just for four and five-year-olds but for three-year-olds. is the hon. Member arguing that we should have no clarity about what we are trying to achieve with children of those ages in primary or nursery education? I believe that that is precisely the provision which we should be developing. I also recognise, as mentioned by the hon. Member, that there are important new training needs for staff working in early years. The Government also accept that. In the longer term, we must ensure that there is evaluation of, and research on, what works for younger children.
I would welcome the formation of a distinct phase of early education, with different approaches to the way in which we teach children and with an emphasis on training teachers and other staff about those approaches. The Government's development of early years education provides us with a very good opportunity for doing so.
The process in Worcestershire continues. Targets must be met, and I hope that my hon. Friend the Minister will comment on the county's progress, especially bearing in mind the very low point from which it started, following the experience of the 1980s.
I am pleased that we are starting to consider child care, too, and I am sure that other hon. Members will discuss that issue. Services for young children and their families obviously need to be developed holistically. I welcome the fact that Worcestershire has a multi-disciplinary audit team, which is studying current provision in order to develop it. In a county such as Worcestershire, where there are urban and rural communities, there is a range of questions to be asked about access to child care and early years education.
The development partnership has already been extended in Worcestershire, and it is working with local groups such as the Redditch Playcare Partnership—a group of providers, users and agencies involved in providing playcare. I know that that local group has welcomed the opportunity to make an input to the consultation undertaken by the early years development partnership and the local education authority.
Just as it is necessary to develop a coherent approach to the provision of early years education, we now need to link education, child care, play and other services dealing with young children. I was slightly concerned by what the hon. Member for Meriden said about institutionalising

children. I agree that education and child care are governed by some different objectives, but it does not help us to develop a coherent approach to all a child's needs if we condemn some of the good work in child care provision as institutionalising children. We need to monitor quality, but that is not helped by condemning existing provision.
On that basis, I especially welcome the Government's commitment to the sure start programme, and to early excellence centres. Clearly, in its widest sense, education does not start at school or nursery or playgroup, and it is affected by more than educational provision. That is why it is so important that we provide parents with support, and that we bring together agencies to work holistically.

Mr. David Drew: One of the key issues is not the choice between providers but the choice within the week, so that children can go to different providers to get a rich variety of different provision.

Jacqui Smith: I agree with my hon. Friend.
I know that the Redditch Playcare Partnership is especially keen to contribute to developing initiatives on sure start and early excellence centres, and I hope that the Minister will consider Redditch in future programmes.
The Government have set tough targets. They are expecting a lot, but they have given a commitment to deliver, which is already reflected in local provision. I am glad that we have had the opportunity to hold the debate, and I look forward to the Government's future work in early years education.

Mr. Don Foster: I congratulate the hon. Member for Meriden (Mrs. Spelman) on securing the debate. I also congratulate her on devoting much of her contribution to the vital importance of ensuring that all provision is of high quality. I am especially delighted to be able to contribute to the debate because I am president of the National Campaign for Nursery Education—many of whose members will visit the palace today. I hope that as many hon. Members as possible will take the opportunity to speak to members of that organisation from their constituencies.
One of the very welcome aspects of the debate has been the fact that hon. Members on both sides of the Chamber have shown a clear recognition of the strong emphasis that needs to be placed on high-quality early years education. I believe that all hon. Members in the Chamber recognise the real educational and social benefit to children that will result from such provision. We know from research that children who benefit from such provision are likely to obtain better jobs in later life, are less likely to make demands on social security systems and are much less likely to be involved in juvenile crime. We also know that such provision provides the opportunity for the early identification of special educational needs and the opportunity to start tackling them as quickly as possible.
As has been said, perhaps equally important is the way in which early years education provides an early opportunity for the vital involvement of parents in the educative process. Evidence suggests that if we can involve them early in the process, they are likely to remain involved at all stages of schooling.


Given the importance that we all place on high-quality early years education, I welcome the progress that is being made. I welcome also, of course, the abolition of the bureaucratic nightmare of nursery vouchers. I have never heard a better condemnation of it than that of the hon. Member for Meriden, who said:
how successful that was not.
The hon. Lady was right: it was not a successful system.
Like the hon. Member for Redditch (Jacqui Smith), 1 welcome the increased emphasis that is now placed on early years development plans and the linking of early years education with child care. I hope that the Minister will consider in more detail the qualification framework for child care providers and the registration of child carers.
I welcome the fact that we have almost universal provision of early years education for all four-year-olds whose parents want it for their children. I also very much welcome the Government's introduction of sure start, which is a scheme to provide education support to the parents of very young children. Incidentally, the idea was contained in the Liberal Democrats' manifesto at the last election. It was not in the Labour party's manifesto, but we are delighted that Labour picked it up and is running with it.

Mr. Hayes: The hon. Gentleman always speaks with great honesty and knowledge on these matters. However, he is welcoming a great deal; that will ring pretty hollow in many parts of the country, because people know very well that there is a pre-school playgroup or nursery closing every other day. There is a crisis in the playgroup sector, particularly for the care and education of two, three and four-year-olds, as the hon. Gentleman will know. I hope that he will deal with that and attack the Government on that basis. I know what a decent and honourable chap he is.

Mr. Foster: The hon. Gentleman has always been so generous to me in his contributions. He will know that I try to be fair to both sides in such a debate and, as he knows only too well, he has anticipated the next part of my contribution.
I was saying before the hon. Gentleman intervened how much I welcome the sure start scheme. I say in, I hope, a somewhat friendly way to the Minister that, although I welcome sure start, I do not think it has been necessary for the Government continually to launch it. One launch would seem to be enough. The Government have now launched the scheme on five separate occasions, which seems to be going over the top. I suppose, to borrow a John Lewis slogan, that Labour is the party that is never knowingly underlaunched.
I recognise that not all is well, and, although I welcome some of the developments that have taken place, I wish to share some concerns with the House. The hon. Member for Meriden, who is now sitting on the Opposition Front Bench—I congratulate the hon. Lady on her promotion—rightly expressed concern about space provision in early years settings. She will recall that it was a Conservative Government who abolished the requirement for space provision. I am delighted to see that the Minister is so supportive of that comment, but I remind her that, despite my repeated attempts, I have not yet persuaded the Government to reinstate the requirement. Perhaps she will make a promise later in the debate to do that.

Mr. Jeffrey Donaldson: Before the hon. Gentleman leaves the subject of sure start, will he

join me in calling on the Government to extend the scheme to Northern Ireland, which is the only part of the United Kingdom that does not have the benefit of the scheme? It is the part of the UK which has the lowest provision of nursery school places.

Mr. Foster: I am more than happy to support the hon. Gentleman in his call. He has raised the interesting point of the variation in levels of provision throughout the UK. In Scotland, for example, the Labour party is committing itself in its manifesto to the provision of high-quality early years education for all three and four-year-olds in that part of the UK. It is a great pity that such a promise to provide sure start in Northern Ireland, for example, or a guarantee of the provision of education for three-year-olds in England has not yet been made, not least given that, at the last election, the Labour party's manifesto stated:
We will set targets for universal provision for three-year-olds whose parents want it.
To date, no target has been set for universal provision by the Labour Government, although I acknowledge that there has been some improvement in the level of provision.

Ms Sally Keeble: Does the hon. Gentleman accept that Liberal Democrat councils have a woeful record of provision of nursery places? I think that I am right in saying that the Isle of Wight is one of the least good providers. Certainly it is Labour councils that have provided universal nursery education, not Liberal Democrat councils.

Mr. Foster: No. I categorically do not accept that from the hon. Lady. She can trade individual local education authorities with me until the cows come home. I assure her that I can match LEA for LEA with her in terms of the inadequate provision of a number of aspects of education. Perhaps she will reflect on the fact that, over the past two years, under a Labour Government of whom many people expected a great deal, many LEAs have had to cut provision further, be they Labour, Liberal Democrat or Conservative. The hon. Lady shakes her head, but, in reality, the amount available in real terms per pupil under a Labour Government has been cut in each of the past two years. That, of course, makes it difficult to make provision.
It is important that we have quality provision. The Government have acknowledged that there is a link between quality of provision and class size; yet, under the Government, average nursery class sizes have increased. That makes it difficult for local education authorities to provide high-quality education. It must be difficult to provide high-quality early years education for the 90,000 children in England alone who are in reception classes of more than 30 children.
We have all accepted that it is important that high-quality early years provision should be made by a variety of different providers, including the voluntary, the state and the private sectors. It must be of real concern, therefore, that there have been many closures of, for example, pre-school playgroups. There is increasing concern about the closure of nursery schools. The National Campaign for Nursery Education is increasingly concerned about reports of


closures and about the sacking of some nursery nurses, who have been reappointed as lower grade staff so as to cut costs. I welcome the Government's announcement that there will be an independent review of the cause for the closure of some playgroups.
The hon. Member for Redditch was right, as was the hon. Member for Meriden, when she said that, if we are to talk about quality, we must be clear what provision we are talking about and what we expect those who are providing high-quality early years education to provide.
Two and a bit years ago, my party advocated the establishment of a foundation key stage. We argued that if we have key stages for all other parts of our education process, there should be one for early years education. We advocated that it should specify the appropriate qualifications for staff, the appropriate setting in which learning would take place and the appropriate set of learning activities. I am delighted, therefore, that the Government seem to be accepting that Liberal Democrat proposal as well, but we must debate what learning activities should be contained within it. I worry that the proposals in the Qualifications and Curriculum Authority review suggest that perhaps—and it may only be perhaps—the Government are going in the wrong direction in respect of the kind of learning experience that they want three and four-year-olds to have.
The review seems to emphasise getting children to read and write early, but all serious research suggests that that is harmful, rather than helpful, to young children. For example, Hungary, Switzerland and Belgium all recognise the importance of delaying the start of formal education and using the early years to set the scene and to prepare children appropriately. The Hungarian kindergarten handbook, the Swiss Rahmenplan and the Flemish core curriculum all emphasise dealing with the concrete and representational, rather than moving to the purely abstract that reading and writing entail.
The Flemish core curriculum states:
Too large and particularly too early an emphasis on the abstract may lead to a method of hearing and blandly repeating: of blindly applying learned procedures and reasoning at the cost of real understanding. When we give children time to gain understanding … they will automatically have fun doing Maths later on.
The research is clear: although Hungarian and Flemish-speaking Belgian children enter primary school at the beginning of what is our year 2 having received no teaching at all in reading and writing, within only one term almost every ordinary Hungarian and Flemish-Belgian child can read and write. That is compelling evidence indeed. It is vital to protect the youngest children in our schools and in nursery settings from inappropriate pressures, which lead to premature and counter-productive instruction. That protection should be guaranteed in the foundation key stage.
I am not alone in expressing concerns about the QCA review. I said at the beginning of my contribution that I was delighted to be the president of the National Campaign for Nursery Education. It has welcomed the

idea of establishing a foundation key stage, but cannot support the current review. It feels that the review is a travesty, saying:
The narrow emphasis on literacy and numeracy and the notion that the 'majority' of children should achieve these goals will inevitably mean that many children are set up for failure; those particularly vulnerable will include summer-born children, bilingual learners, boys and those with Special Educational Needs.

Mr. Hayes: Will the hon. Gentleman give way?

Mr. Foster: I will not, because other Members want to contribute.
The foundation stage should protect children from counter-productive pressures and open, rather than close, avenues for learning.
We have made much progress in early years education, which I welcome, but I believe that, in this area at least, the Government may be going down the wrong road. As everyone is making special pleading, I hope that the Minister will make an visit to the Bath Opportunities playgroup, which provides excellent support to children with severe learning and physical difficulties. It has serious financial problems and anything that she can do to help will be gratefully welcomed.

Mrs. Anne Campbell: I welcome the debate and congratulate the hon. Member for Meriden (Mrs. Spelman) on securing it. It is particularly appropriate that she has done so, because it was Margaret Thatcher who remarked in the 1970s that her Government would provide nursery education for all three and four-year-olds. A Conservative Government never came anywhere near meeting that aspiration. Nursery provision in Cambridgeshire, which is my local authority area, never reached higher than about 34 per cent. in the whole period of Conservative government. It is fitting that a Labour Government will achieve nursery education and appropriate child care for all three and four-year-olds whose parents want them to have it.

Mr. Ian Bruce: Will the hon. Lady give way?

Mrs. Campbell: I have only just started my speech and I will not give way at this stage.
It is appropriate to provide for parents a wide choice of nurseries, playgroups, child minders or even reception classes for their children to take advantage of. A good number of parents with mature four-year-olds would like their children to be in reception classes rather than in nursery classes, but that gives rise to a particular issue in my constituency. Cambridgeshire has a policy of allowing schools to admit children in the September after their fourth birthday, which means that children born in July or August may start in reception classes shortly after their fourth birthday.
A body of parents have formed a group called Action for Fours, which is led by Catherine Hurley and Kate Polack—two young mothers in my constituency who feel that they should not be forced to send their children to school. I wrote to my hon. Friend the Minister about this issue and she rightly said that parents should choose whether their child should start school before the statutory age. However, there is a problem for schools: if a child is


not in full-time education when the census is conducted in February, but a place has been kept vacant, they do not receive funding for that child. An over-subscribed school will not want to keep places vacant for children who may arrive halfway through the year. I hope that the Government will be able to address that dilemma.
I am particularly pleased that the recently published policy guidance on school admissions says:
Some admissions authorities for primary schools offer places in reception classes to parents before their children are of compulsory school age, in accordance with their published admission arrangements. If a parent is offered and accepts a place during the normal admission round but asks to defer their child's entry to school until he or she is of compulsory school age, the admission authority may agree to the parent's request provided the place is taken up within the same academic year.
That is a most welcome statement, and I hope that the Government will find ways to compensate schools if a child is admitted, but not in place in February when the census is conducted.
Cambridgeshire has been fortunate in benefiting from the money from the reduction in infant class sizes, and the £1.7 million allocated to it this year will provide 69 additional teachers and 11 extra classrooms. Primary schools in Cambridgeshire are among the lowest funded in the country, so that money is particularly welcome. It will virtually eliminate classes of more than 30 for five, six and seven-year-olds in my constituency and throughout Cambridgeshire.

Mr. Hayes: 1 hear what the hon. Lady says about five, six and seven-year-olds, but she must be aware that classes for older primary, secondary and nursery children have increased in size since the Labour party came to power. The Smart Start pre-school in Market Deeping in my constituency, which has been providing small class sizes for children in the area for 25 years, is facing closure as a result of Government policy, and people are very angry about that.

Mrs. Campbell: Cambridgeshire county council, which is Tory controlled, is one of the problems that my constituency faces. In 1995–96, when there was a Labour-Liberal administration in Cambridgeshire and a Conservative Government, the authority spent £15 million above the education standard spending assessment; last year, the authority spent £6 million above it; and, this year, it is spending £5 million above it. The leader of the Tory county council in Cambridgeshire said on BBC Radio Cambridgeshire this morning that he would like, over the years, to see the council reducing the gap between what it spends on education and what the SSA says it should spend. The implication for my constituency is £4.8 million-worth of cuts. Schools in my constituency will be devastated by that, because it means that, as the Government increase expenditure on education, Cambridgeshire county council is determined to reduce its contribution, and schools will see no benefit from the extra money that the Government are putting into education.
I refer briefly to the national child care information systems, which my hon. Friend the Minister is pioneering. I am pleased that she is basing that work on some of the work that has been done in my constituency. The scheme that I started, called "Opportunity Links", to provide education for parents who wish to return to work has been

an outstanding success in Cambridgeshire. It is an internet-based information system, which provides information not only on child care, but on jobs, training and benefits advice. I am pleased to say that there are some 1,300 accesses to that website every week. It is proving to be extremely popular and a useful tool for parents who wish to get back into the workplace.
However, there is still a problem, as perceived by Cambridgeshire county council, about the data protection issues connected with making child minder information available on the internet. The local authority quotes the Children Act guidance, which states:
whilst local authorities have a duty to provide information on childcare provision, the register should not be left on 'open shelves'… This implies that the public need to request access to it through contact with a local authority officer. This guidance was an attempt to prevent people from having access to the register who were not genuinely seeking childcare.
We all recognise the difficulties with paedophile rings and the sensitivity of some child care information. We have got around that problem very well in Cambridgeshire by writing to every child minder and getting a signed agreement from everyone who wishes to have her information published on the internet. I believe that that is the way to proceed. I do not know whether other counties have come across the same problem or interpreted the legislation in the same way, but the issue needs to be addressed.
I welcome wholeheartedly the Government's efforts to improve early years education, which is vital in terms both of raising educational standards and of the health and livelihood of future generations.

Sir Nicholas Lyell: I am grateful for the opportunity to make a short contribution to this debate. Like other hon. Members, I shall start by congratulating my hon. Friend the Member for Meriden (Mrs. Spelman) on initiating the debate and on her comprehensive and thoughtful speech.
I want to lay my emphasis on the earlier years and take this opportunity to express my strong support for the Pre-School Learning Alliance and the many pre-school groups in my constituency. Pre-school playgroups play a vital role in the education of young children and are of benefit, as I was glad to hear the hon. Member for Redditch (Jacqui Smith) acknowledge, not only to children but to parents, in assisting them to teach and encourage learning through play, both in the playschool and at home.
Not long ago, as many as 8,000 children in Bedfordshire attended pre-school playgroups, but it must be recognised that playgroups are under pressure, numbers are dropping and playgroups are closing, because of the combination of factors with which they are challenged. Both sides of the House, particularly the Government, need to rally to help them.
The pressures come from a combination of changes in the funding system, and increased costs and regulation through the working time directive and the minimum wage, and the consequential national insurance requirements. Because schools can now receive funding for four-year-olds —one quite understands that schools wish to maximise their revenue—they are putting pressure on parents to send children in order, it is said, to secure a


place at five. I have had too much anecdotal feedback from visiting pre-school groups in my constituency to be in any doubt about that. The effect is not only to put pre-school groups under financial pressure, but to cream off the four-year-olds, who are an important part of three-to-five provision because they provide, in a sense, role models for the younger children in the integrated type of education that pre-school groups provide so effectively. Numbers are therefore falling just at the time when costs and pressures are rising.
The Pre-School Learning Alliance is responding by boldly facing up to the challenge. It does not want to get itself into a political wedge; it wants to rally and increase its numbers. I believe that it will. A great many children throughout the country still do not attend pre-school playgroups and do not get those benefits. We need to reach out to them. In doing so, it will be possible to rebuild pre-school numbers and thus help to solve the problem, provided that we get assistance from local education authorities and the Government recognise that problem.
The point to emphasise about pre-school playgroups is the sheer standard and professionalism of what they provide. I have been interested in this subject since before I entered the House more than 20 years ago. My wife was a professionally trained teacher who taught in Lambeth and Camberwell, and when we had small children she ran a playgroup at our home. I saw the value then, and have seen it ever since. I have attended annual conferences of the Pre-school Playgroups Association in Bedfordshire.
Recently, I visited two pre-school groups in Dunton and Stotfold in north-east Bedfordshire, and I shall visit Potton this Friday. I should emphasise that those pre-schools are inspected by the Office for Standards in Education and have received excellent reports. Their teaching through play is admirably adapted for children between rising three and rising five, and their staff-pupil ratio is only 1:6, which is much better than the average of 1:10, which lower schools and nursery schools can hope to achieve.
In addition to achieving that very low staff-pupil ratio, those pre-schools are attracting mothers and other helpers, who learn and carry the knowledge back home. They are extremely well equipped. I was deeply impressed at the variety of books that they had. Last week was National Book Week and I opened a new book corner in the Poppies playgroup in Stotfold. The pre-schools are equipped not only with books, but with simple computers, which introduce children to computers at such a young age that they come naturally to those essential parts of modern life.
Therefore, let the message go out: pre-school learning has a vital part to play in the education of our children. Both the Government and local education authorities should work closely with the independent pre-school groups. Charitable, voluntary and private provision work together to provide a degree of provision, which no amount of aspiration is likely rapidly to achieve through the state sector, and it is available here and now. They are a vital resource and a wonderful example of how local charitable and private sector initiatives can meet local needs, raise standards and enhance the future for our children.
I wish to use the last few seconds available to me to make a suggestion through you, Mr. Deputy Speaker, to the House authorities. Having been able to take part in this debate and knowing that the winding-up speeches are about to begin, I believe that we should seriously consider having a time limit in well-attended debates of this nature.

Mrs. Theresa May: I join other hon. Members in congratulating my hon. Friend the Member for Meriden (Mrs. Spelman) on having secured this debate. I commend her on the excellence of her speech in opening the debate on this important topic. It is notable that this is the third debate that we have had in the House in the past two years on pre-school or early years education. It is also notable that all three have been Adjournment debates initiated by Conservative Members. My hon. Friend the Member for Aylesbury (Mr. Lidington) initiated a debate on pre-schools in June 1997 and my hon. Friend the Member for West Worcestershire (Sir M. Spicer) initiated a debate on nursery education in May 1998.
My right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) made the point that this has been a well-attended debate, although I am interested to note the gender imbalance on the Labour Benches, which suggests a slightly outdated approach to this issue. Some hon. Members hoped that they would be able to contribute to the debate and to raise their concerns. I sincerely hope that the Government will now consider giving Government time to a debate on this important topic to enable all hon. Members to express their concerns about what is happening in pre-schools, and to contribute to the real debate about what should be the intention of pre-school and early years education and what is right for children.
Children's needs must be paramount in our consideration of this issue. What matters is that we provide high-quality early years education for children, and that it is appropriate for those children. We must recognise that pre-school and nursery education are distinctly different from compulsory education at statutory age. We require appropriate provision for children at different ages.
The danger is that young children are increasingly being taken into the primary school framework. Children are being given too formal an education at too early an age. That issue was dealt with in an article in The Times Educational Supplement on 9 April. It referred to nursery children being victims of a "too much, too young" culture and that four-year-olds were at risk of burn-out because of the stresses of formal education. My hon. Friend the Member for Meriden made the valid point that boys were particularly likely to be turned off school by this too early formal education.

Mr. Ian Bruce: It is important for the Government to understand that we are not suggesting that we solved this problem when we were in government. We had the problem when vouchers and the passporting of funding were introduced. Does my hon. Friend think that the Minister should carefully study counties such as Dorset, where children who are four in August are taken on for


the next year, with full funding? If they are not four, they do not get funding for pre-school in the next term and have to wait until after the new year.

Mrs. May: My hon. Friend has expressed a valid concern about the point at which funding cuts in and about four-year-olds who are taken into primary schools. Primary schools are increasingly encouraging four-year-olds to go to their schools by bringing pressures to bear on parents. Labour Members may deny it, but that is happening in the real world.
We should recognise that the provision must be appropriate, that children develop differently and that they have different needs. That is why we want a diversity of provision, so that parents can have a real choice. As a direct result of Government policy, we are faced with two dangers. First, children are being taken into the school framework of formal education at too early an age. Secondly, parental choice is being reduced.
Problems occurred with the nursery voucher scheme, but, far from changing it, the Government abolished it and introduced a grant scheme and early years education partnerships, compounding the problems that had begun to occur. Government figures for January 1998 show that, of four-year-olds in local authority or private and voluntary sector provision, 60 per cent. were in infant classes in maintained primary schools. That is not even 60 per cent. in reception classes: it is 60 per cent. of four-year-olds in reception and other infant classes in maintained primary schools.
Those figures also show that diversity and choice are being reduced. In January 1998, 86 per cent. of four-year-olds were in local authority provision, be it maintained nursery schools, nursery classes or infant classes, with the vast majority being in infant classes rather than in appropriate nursery provision. Only 14 per cent. were in private and voluntary sector pre-schools.
The Department for Education and Employment figures show that, by September 1998, the balance was worse. More than 89 per cent. of four-year-olds were in local authority provision, and less than 10 per cent. were in private and voluntary sector provision. The reality is that pre-schools are closing. In the past two years, 1,500 pre-schools have closed, and there is a danger of a further 1,700 pre-schools closing this year.
I join my right hon. and learned Friend the Member for North-East Bedfordshire in recognising the contribution made by pre-schools that are members of the Pre-School Learning Alliance. In its booklet about the importance of pre-schools, "No Chance to Play: No Chance to Learn", the alliance describes children in pre-schools as having
the chance to play and learn with other children, to discover new experiences and to have the opportunity of a good educational start in life.
It says:
Pre-schools provide a warm and caring environment and vital learning opportunities for young children. Parents benefit too".
That aspect has been touched on by hon. Members, but not in any detail, and I want to refer to the advantages for parents.
A study undertaken by the National Institute of Adult Continuing Education shows that parental involvement in pre-schools leads to more assured parenting, increased confidence and widened horizons in terms of further

education and training. It also encourages learning at home through reading and imaginative play. It has an important impact in enabling many parents, predominantly women, who may not otherwise have done so, to go on to further education.
The Pre-School Learning Alliance provides for 40,000 adults—predominantly women and 93 per cent. of them over the age of 25—to enrol each year on courses developed by the alliance. There are progression routes to other qualifications, such as national vocational qualifications in early years care and education.
Pre-schools offer a gateway for parents who may otherwise not consider returning to study. In the sample of parents studied by the National Institute of Adult Continuing Education, almost half the participants had left school at the age of 16. Their involvement in a pre-school was giving them real opportunities for education that they otherwise would not have had.
Those opportunities are beginning to be denied to parents because the Government's policy is leading to the closure of pre-schools. Children at the age of four are being encouraged to go into reception classes in primary schools. The impact of employment legislation, particularly the loss of income for pre-schools caused by the loss of numbers, is exacerbated in a variety of ways by the increased costs of the minimum wage and the working time directive, as my hon. Friend the Member for North Essex (Mr. Jenkin) said.
Pre-schools are faced with the decision either to put up charges or to close. What is the Government's answer? The answer from the Minister is that there should be differential charging on the basis of income. A means-tested nursery tax is the Government's answer. They force pre-schools to close, and when they are desperately trying not to close by putting up charges the Government's answer is the equivalent of a means-tested nursery tax. That proves that the Government do not understand what is happening in the real world.
I hope that the Minister will tell us where the money that the Government have promised for pre-school education is going. In the last Education and Employment Question Time, the Minister announced investment of
£8 billion in early education and child care",
which has subsequently been identified, and
£8 billion in providing high-quality and affordable pre-school education".—[Official Report, 18 March 1999; Vol. 327, c. 1257.]
That is £16 billion. That is what the record shows: that is in Hansard. I hope that the Minister will tell us where the money is going, because it certainly is not reaching pre-schools.
Pre-schools matter. They provide an important learning environment for children through play, and they provide important benefits for parents. Government policy is closing them down, and Government should stop it.

The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): I congratulate the hon. Member for Meriden (Mrs. Spelman) on securing the debate. Nothing is more important to ensuring that young children can develop their full potential than the early years of their lives, and their first experiences in education. I agree with all who


have spoken that we do not have enough time to debate this vital issue in the House, but I welcome the opportunity provided by the hon. Lady.
I am particularly delighted by another opportunity—the opportunity to remember the hon. Lady's predecessor, the late lain Mills. He stoutly defended his constituents' interests in the House by publicly opposing, in their dying days, the Conservative Government's policies on early education, although he himself was a Conservative Member of Parliament. Solihull, through the disastrous voucher scheme, lost more money than any other local education authority, and was punished for being more successful. lain Mills could not stomach that: he supported his authority, opposed the Tory Government and denounced the ill-conceived and damaging voucher scheme.
It was the voucher scheme that dealt the most severe blow to the private and voluntary sectors as schools competed for four-year-olds. Having been conceived with the intention of stimulating growth in those sectors, it harmed them and forced closures. Any latter-day sanctimonious defence by Opposition Members of the role of the private and voluntary sectors in early years education should be judged against their record in government. Through ideological stubbornness, they forced the closure of many early education places provided by those sectors.

Mr. Brady: rose—

Mr. Ian Bruce: rose—

Ms Hodge: I will not give way. I have only a few minutes left, and I want to deal with the issues that have been raised.
When this Government took office, we replaced competition with a planned partnership approach that now covers both early education and child care. As my hon. Friend the Member for Redditch (Jacqui Smith) said, we need to plan our services for young children.
I am happy to defend our record in government. In our manifesto, we promised that every four-year-old whose parents wanted a free part-time early education place would be entitled to one, and we fulfilled our commitment. The hon. Member for Maidenhead (Mrs. May) is wrong about that. We also said—the hon. Member for Bath (Mr. Foster) was slightly wrong about this—that we would set a target for three-year-olds. We have done that: we are committed to doubling the number of free places for three-year-olds to 66 per cent. by 2002, and we will achieve that target. We are bringing together early education and child care to provide a seamless and coherent service for families, built around children's needs.

Sir Nicholas Lyell: Will the Minister give way?

Ms Hodge: No. I will complete my speech.
Let me say this to the hon. Member for Meriden. Of course the interests of the child are central to our concerns; it is because we are putting those interests at the centre of our policy that we are building a proper infrastructure for both early education and child care.

Even pre-schools in church halls, which the hon. Lady mentioned, should not be there to support church finances. They should be there to support young children.

Sir Nicholas Lyell: rose—

Ms Hodge: May I deal with the issue raised by the right hon. and learned Gentleman?
We value the contribution of pre-schools, particularly because of the unique quality that they bring to the early education sector: parental involvement, with all that it means to the development of young children. I agree with the hon. Member for Maidenhead about that. We know that pre-schools are concerned about closures; we know that they blame closures for the loss of four-year-olds to maintained nurseries; we know that they are worried about the minimum wage. We do not agree with them about the figures relating to closures, but my officials are holding discussions with the Pre-School Learning Alliance to see how we can reconcile our two views. We are taking steps to ensure that both sectors can contribute to the expansion of early years education and child care.
We instruct partnerships to ensure that their plans provide for help for the voluntary and private sectors. Last year, we gave £500,000 to ensure that pre-schools were able to sustain their provision, and we are giving a further £500,000 this year. We have introduced the working families tax credit, which will help individuals with the cost of school care and enable schools to raise their fees. I think it is inappropriate for anyone working with children to be paid less than the minimum wage: our children are too precious. We shall be conducting a review, which will show not what is closing pre-schools, but how the Pre-School Learning Alliance can contribute to the expansion of early years education.

Mr. Ian Bruce: Will the Minister give way?

Ms Hodge: No.
Let me deal with some of the issues relating to quality. I agree with my hon. Friend the Member for Cambridge (Mrs. Campbell) that some four-year-olds are going to school too early. In my view, it does not matter where children are; what is important is the experience that they undergo, the qualifications of those who work with them and the adult-child ratios involved. That is why we are addressing all the issues of quality that have been raised today.
We are looking at the curriculum, and we have presented proposals for the reform of desirable learning outcomes. I am glad that the hon. Member for Bath welcomed the foundation stage. Our emphasis is on pre-learning schools, and on the importance of children learning to speak, to listen, to concentrate and to work in a group; but we must also recognise that, in the foundation stage, there is a difference between a three-year-old and a rising six. The curriculum must reflect children's development.
As the hon. Member for Meriden said, people are crucial. That is why we have established a national training organisation. It is why we are creating a qualification framework, and putting a large amount of money into training. We are also enhancing the status and importance of early years work, not least through the introduction of the minimum wage and early years


education degrees. We are reviewing regulation and inspection, as well as the child protection and data protection issues raised today. We are supporting parents in raising quality, through the sure start programme, excellence centres and other initiatives mentioned in the debate. Quality is essential to early years education. I am glad that hon. Members on both sides of the House accepted that today, and I assure them that we are acting accordingly.
I am delighted that we have had this short, but important, debate on crucial issues. I am grateful to those who have taken part, and, in particular, to the hon. Member for Meriden. We have a good story to tell. This Government recognise the importance of early years education. They have firmly put their money where their mouth is, providing a massive expansion of resources: as the hon. Member for Maidenhead said, we are investing £8 billion over the next four years.
The Government have already fulfilled their pledge to provide a free nursery place for every four-year-old whose parents want one. They have embarked on an ambitious increase in the number of places for three-year-olds. They have not merely talked about a national child care strategy; they are creating one. Over the first 20 months of the Government's life, they have created more new child care places than the last Government managed to create during their long 18 years in office.
Investing in the early years of a child's life makes sense. It makes sense for the child, ensuring that we give all children the opportunity to develop their full potential. It makes sense for society, helping us to build an inclusive society by promoting success and preventing alienation and failure. It makes sense for the taxpayer, in that for every pound that we invest in a child's early years we shall save many pounds later on everything from support for a child with special educational needs to the payment of income support.
We will pursue our policies on early years education. They are right, important and necessary. We shall be happy to be judged on our record, and our achievements, in this crucial area of public policy.

Road Deaths (Charging Policy)

Mrs. Rosemary McKenna: I am very glad to have been able to secure this debate on the role of Scotland's legal system in implementing charging policy in road deaths involving vehicles. This may very well be the final opportunity to debate a matter that, after 1 July, will be devolved to the Scottish Parliament, and it is appropriate that the debate should be on such an important issue. Although the Road Traffic Act 1991 is a United Kingdom responsibility, prosecution of the law in Scotland, under the separate Scottish legal system, is a devolved matter.
Many of my colleagues have sent messages of support for the debate, although—for a variety of reasons, which hon. Members will appreciate—they have not able to attend it. Nevertheless, I am pleased that so many hon. Members are able to be here.
On 18 September 1998, Steven Dekker, my constituent and near neighbour, celebrated his 24th birthday with his family and his girl friend of six years, Gail. On Saturday, 19 September, Gail and Steven spent the day in Glasgow, shopping, enjoying being together and planning their future together.
As they drove home to Cumbernauld, at 6 pm, on a bright, clear evening, a van being driven the wrong way on a single carriageway hit them head on, killing Steven and injuring Gail. The collision occurred as Steven came round a bend, on a one-way single carriageway, with no chance of his taking any avoiding action.
I am pleased that Steven's parents, his sister Vivien, Gail and other members of the family are here for today's debate. I should like to express their and my appreciation to the Minister for sparing time to meet them earlier today.
In the past two years, the issue has been debated in the House on several occasions, and in two notable Adjournment debates. One of those was initiated by the Economic Secretary to the Treasury, my hon. Friend the Member for Leicester, West (Ms Hewitt), and the other by my hon. Friend the Member for Enfield, Southgate (Mr. Twigg).
As parliamentarians, we are faced with a significant problem that we have the power to deal with. The House, after investigation and debate, passed a law—the 1991 Act—that established the offence of causing death by dangerous driving. The charge is simple and clear, and it should be a powerful weapon in deterring very bad driving. However, Steven Dekker's death has taught me—and, so far, more than 2,000 constituents who have signed a petition—that the Crown Office is failing properly to charge the very people for whom the charge was designed.
The Crown Office decided to prosecute Andrew Wilson, the man who killed Steven Dekker, not with death by dangerous driving, but with the lesser charge of careless driving. The proceedings in court lasted 15 minutes.
In June 1997, Steven Dekker graduated with a BA (Hons.) degree from Stirling university. He was ambitious. He had been employed for a year with British Airports Authority as a graduate trainee manager. He was one of eight people selected, from 1,300 applicants, for


the position. He was a people person, and was liked well by all who knew him. He loved all sport. He played golf, football and ran in half-marathons. In short, he loved life.
Andrew Wilson was returning home from a planned trip. He ignored the safety of his own children from the very moment that he left his home, transporting a six-year-old child in the front of his van, and nine and six-year-old children in the rear of his van, none of whom were seated or restrained by seat belts. In the rear of the van were also motor-cross bikes, unrestrained.
Andrew Wilson ignored eight directional road signs, to turn across chevron markings and road arrows and travel the wrong way down a main road. In court, his defence agent made it clear that he did not make a spur of the moment decision. He stopped his van, which he drove for a living, and consulted with his fellow passenger, who was a lorry driver by trade. Then, after a few moments, he made a U-turn, across solid-line chevron markings and against road arrows, to travel the wrong way on the main road into Cumbernauld. My constituents, and those who have seen the evidence and photographs, are incredulous. The question is: Where on earth did he think he was going?
In court, the procurator fiscal revealed that Andrew Wilson was found by police at the scene,
wandering around in a dazed state saying it was my fault I was going the wrong way".
In court, his defence agent said that Andrew Wilson was lost. Had the Crown Office levelled a charge of causing death by dangerous driving, all the facts and arguments would have been heard.
The facts are that, on the day that Steven was killed, the main road to Cumbernauld was closed, and that anyone who travelled on the A80 would have known that. That morning, Andrew Wilson travelled along the A80. What he did not know was that the main road into Cumbernauld could be accessed by another slip road. Perhaps that lack of knowledge explained his bizarre manoeuvre. However, since the Crown Office charged Andrew Wilson with merely careless driving, to which he pleaded guilty, those facts and that argument could not be aired in court. Therefore, there is absolutely no way of knowing.

Mr. Tom Clarke: I am very grateful to my hon. Friend, and congratulate her on obtaining this debate—which, given the demands on parliamentary time, is not an easy thing to do. As she will know, some of my constituents— particularly Mr. and Mrs. Dekker, whose nephew Steven was, and who both live in my constituency, in Chryston—want very much to support the tremendous work that she has done. One of the points that should be made is that the accident, and other accidents, occurred despite substantial investment in road works in the area. That should have made things easier, rather than more difficult and leading to this terrible loss.

Mrs. McKenna: My right hon. Friend is absolutely right: there is absolutely no problem of road investment in the area. One of the reasons why people find it so difficult to understand the issue is that the roads are good, safe and secure. People should be able to drive on them safely, and to feel safe as they drive about their town.
All the facts point to the Crown Office not being prepared to prosecute on the basis of the law. Evidence shows that, since 1991, of charges brought by police of death by dangerous driving, only 47 per cent. of people so charged will be proceeded against, and that the remaining 53 per cent. of charges are downgraded or plea-bargained to the lesser charge of dangerous driving, which ignores the fact that a death has occurred.

Mr. Andrew Miller: As my hon. Friend knows, I chair the all-party group for justice for road traffic victims and their families. The research shows that the figures that she quoted can be extended right across the British Isles. I do not know—1 should be grateful if she can tell me—whether, in Scotland, police conduct their investigations of road deaths with the same emphasis that they investigate any other violent death. The statistics that I have seen suggest that police do not treat that type of violent death as the scene of a crime, as they do in investigating any other violent death.

Mrs. McKenna: My hon. Friend is right. Moreover, because the Crown Prosecution Service is not prosecuting cases as dangerous driving, police are tending to reduce the number of charges of death by dangerous driving. Therefore—although the 1991 Act was an attempt to ensure that people are protected properly, and that death by dangerous driving is recognised as a criminal act—there has been a downwards, rather than an upwards spiral in dealing with the matter. My hon. Friend is absolutely right to say that it is a serious problem that has been highlighted today and in previous debates.

Mr. Alan Clark: I apologise to the hon. Lady for arriving a couple of minutes late for her important debate. Regarding the point raised by the hon. Member for Ellesmere Port and Neston (Mr. Miller) and others, as I have said before in the House, part of the problem with such horrendous tragedies relates to the language with which they are described. All too often, the police and the press describe such deaths as having occurred in a road accident. The implication of the word "accident" is that it is the result of ill fortune and cannot be avoided. It downplays the culpable criminal element that all too often is involved in such incidents.

Mrs. McKenna: I am grateful to the right hon. Gentleman for that excellent point. The family has lost a son, a nephew and a brother, yet the language of the law does not recognise that. That adds to their despair and they feel that their grief has been intensified by the way in which the case has been treated by the law.
Another difficulty is that many of the decisions are taken out of court. Decisions are made by the prosecution service to plea bargain or reduce the charge which should be properly applied. The family is not involved and they feel excluded. They feel that there is no transparency in the decision-making process and that is a serious concern.

Ms Margaret Moran: Will my hon. Friend give way?

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The purpose of the Adjournment debate is to allow the hon. Member to put her case to the Minister and for the Minister to reply. The hon. Lady has taken several interventions and should leave it at that.

Mrs. McKenna: The fact that so many hon. Members are here and wish to intervene shows how important they consider the issue. The Minister must understand that and realise that it will be raised regularly.
Following the North report, the Road Traffic Act 1991 replaced an earlier offence of reckless driving with the new offence of dangerous driving. The new offence is based more on the standard of driving—for example, on the driving being far below the standard of a reasonable and competent driver—and less on the driver's state of mind. It was designed to make the offence easier to prove in court. The intention was to enable more prosecutions to be pursued for the more serious dangerous driving offence.
The report decided that a new offence of causing death by careless driving should not be introduced as "a crime based on consequences" might be justified where the level of culpability was high, but not in the case of carelessness. The committee's definition of carelessness was as follows:
Carelessness might amount to no more than a minor error of judgment or a moment's inattention.
We must focus on the distinction between a minor error of judgment or a moment's inattention and a higher level of culpability.
The North report stated:
Death should be singled out for special treatment because it is the most serious consequence of a criminal act, and in doing so would exemplify the concern of the law for the sanctity of life.
In Steven's case, the police prepared the charge of death by dangerous driving, or alternatively careless driving—as is the procedure. The charge of death by dangerous driving is not brought lightly by the police, who spent resources of time and money to substantiate the charge.
The Crown Office, which acts in the public interest, looked at the culpability of Andrew Wilson and prosecuted him with one charge of careless driving. In their words, the
investigation revealed the required degree of very bad driving to be absent".
We find that incredible.
In court, the sheriff checked with the fiscal that a charge did not take Steven's death into account. The fiscal confirmed that that was true. The sheriff stated that his "hands were tied", fined the defendant £750 and banned him from driving for one year.
Steven's family feel that the concern of the law for the sanctity of life has been ignored in the charge of careless driving. International human rights law is based on the inherent dignity of the individual and the Crown Office appears to respect neither Steven's dignity nor that of his family.
At the 15-minute hearing no evidence was presented and no witnesses heard as the accused pleaded guilty to the reduced charge. There are many questions to be answered. The Dekker family is considering the possibility of a fatal accident inquiry to ventilate in public

the facts, to establish how Steven died and possibly to launch a civil action for damages in order to get legal recognition that Andrew Wilson killed Steven Dekker.
I support the words of Mary Williams, executive director of Brake, an independent road safety organisation. She said:
It is our carefully considered opinion that the charge of careless driving, which carries a maximum sentence of a very low fine, should be dropped, and drivers who break the law should be charged with dangerous driving, death by dangerous driving or manslaughter if their actions have killed. There can be no carelessness behind the wheel of a vehicle—spilling a bottle of milk is careless, failing to drive safely can only be considered dangerous. A wide sentencing structure would accommodate the wide variety of illegalities which could be encompassed under these charges.
The public sense of justice requires that the distinction between careless and dangerous —a higher level of culpability—should be determined in court, with all evidence presented and statements from witnesses heard. It is a gross injustice to innocent victims such as Steven that their life and death can be denied that recognition by the state. Like many other families, the Dekker family has found that the non-implementation of the law adds additional grief to families who are already bereft, and to society, an undermining of the expectation of justice.
Mr. and Mrs. Dekker lost a son, Vivien lost a brother and Gail lost her best friend and her future with Steven. I totally support the family and Gail in their attempt to bring the matter to the attention of Parliament and the wider public. Nothing can bring Steven back, but if the law can be changed as a result of his death and the deaths of others on the roads, some good may come of it.

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): First may I record my appreciation to the House? The fact that this is a short debate in no way detracts from the serious concerns that have been raised by several hon. Members who would have wished to debate them for longer. I recognise that and acknowledge their deep concern.
The death of Steven Dekker last September was a tragedy. Any sudden death is tragic and none more so than the death of a young man as promising as Steven Dekker, who was a graduate trainee at the British Airports Authority. This morning, I had the benefit of meeting Steven's family. I understand something of the depth of feeling and my heart goes out to them for their loss. Since his death, many questions have been asked about road safety and the proper way to deal with road traffic cases that arise under criminal law. It is only right that such a tragedy should make us ask such questions and I pay tribute to the diligence of my hon. Friend the Member for Cumbernauld and Kilsyth (Mrs. McKenna) in raising the matter on behalf of her constituents.
Let me first turn to the role of the criminal law in dealing with road traffic accidents and make it quite clear that there is no lack of serious charges to bring, depending on the evidence in the case. However—and this is a point that the relatives of the victim may naturally and understandably find hard to accept—the fact that an accident has had fatal consequences does not necessarily mean that the other driver involved is guilty of dangerous driving. We all take a risk every time we drive and a simple misjudgment can have consequences as terrible as those of any deliberate crime.


The law has to cover a wide variety of circumstances. At the upper end of the spectrum there are, fortunately, very rare cases when the vehicle is used deliberately as a weapon. In such cases, it might be appropriate to bring charges under the common law, and if the victim was killed, the prosecution would not hesitate to consider indicting the person on a charge of murder or culpable homicide.
Next in gravity is the offence of causing death by dangerous driving, for which the maximum sentence under the road traffic legislation is 10 years. This offence cannot be dealt with under summary procedure.
Next again is the offence of dangerous driving, which has a maximum prison penalty of two years under solemn procedure, and of six months under summary procedure. Finally, there is the offence of careless and inconsiderate driving, which cannot give rise to a custodial sentence and which cannot be dealt with under solemn procedure.
In his role as head of the prosecution service, the Lord Advocate is independent of the Government of the day. The House will recognise that it is important that he should be so. It is for the prosecution to select the appropriate charge and the mode of trial, taking into account any statutory restrictions that may apply, what the evidence suggests about the relative culpability of the driver who will face the charges, and, of course, the need to prove any charge beyond reasonable doubt.
Ministers are not in a position to comment on what charges should be brought in any individual case. That is why I cannot comment on the charges brought in this case. The Crown Office has made it clear that the most careful consideration was given to what charges were justified on the available evidence and under the existing law.
There is a lot of publicity about the downgrading of charges. The charge brought was one of those made by the police soon after the event, but, as often happens, the police—who were not in full possession of the facts at the time—charged the accused with a number of alternative offences. However, it is for the procurator fiscal to select the appropriate charge after full investigation in the light of the evidence.
At the request of the family, the charge selected by the prosecutor was reviewed, but, in this case, was confirmed as being appropriate. The Crown Office has stated that the question of costs played no part in the decision about what charge was appropriate. As we have heard, the sheriff who heard all the evidence on the circumstances decided that the appropriate sentence was a fine of £750 and a ban from driving for one year. The sentence imposed is entirely a matter for the court, but clearly it reflects the culpability of the accused and not the terrible consequences of the accident.
There remains the question of a fatal accident inquiry. I understand that the procurator fiscal has received a letter from the solicitors acting for the Dekker family, confirming that the family wish such an inquiry to be held. That is a matter for the Lord Advocate to decide.
The Government rightly stand clear of such decisions and of decisions on prosecution. However, we need to consider whether such cases suggest any need for a change in the law. I should therefore like to say a little about what we are doing to keep the law under review.
This matter was last reviewed fully in the North report, published in 1988. Detailed consideration was given to the possibility of creating a new offence of causing death by careless driving. However, the report recognised that any road accident has the potential to have serious consequences, whether the accident occurred as a result of deliberate bad driving or of a lapse in concentration.
The North committee therefore took the view that, as a general rule, sentences for road traffic offences should be based on the standard of driving, rather than on the consequences of that driving. That issue has threaded its way through this afternoon's debate.
Where the death is due to carelessness and there is no question of drink or drugs, the committee did not consider that it was appropriate to have a "causing death" offence. That is the philosophy underlying the current formulation of the offences in the road traffic legislation, and it has been supported by successive Governments. There is a view—which I understand—that it would be desirable to have an offence of causing death by careless driving, even when there is no question of drugs or drink being involved. The Government are currently reviewing that possibility.
The Government are also undertaking comprehensive research into the way in which bad driving offences are dealt with by the criminal justice systems, both north and south of the border. This is the key issue being addressed by my hon. Friend the Member for Cumbernauld and Kilsyth. The research, undertaken on behalf of the Department of the Environment, Transport and the Regions, will examine the effect on convictions before and after the changes in the law made by the Road Traffic Act 1991. It is using current cases to examine the whole process, from charging to sentencing. The results of the research should be available by the end of next year.
Finally, I should mention the likely impact of the Scottish Parliament in this matter. Although the criminal law, with certain specific exceptions, will be mainly devolved to the new Scottish Parliament, road traffic law has largely been made on a Great Britain basis. I therefore expect that the new Scottish Ministers will be closely in touch with colleagues in Whitehall Departments in considering the way forward in an area of law in which it is so difficult yet so important to get the balance right.
I shall touch briefly on some of the other aspects of road safety that we are currently pursuing. The criminal law in this respect is vitally important, and that has been the focus of the concerns expressed by my hon. Friend the Member for Cumbernauld and Kilsyth, but it goes much wider in relation to road safety matters.
In 1997, 377 people were killed on Scottish roads. That is 377 people too many. Each of those deaths represents a tragedy for all concerned, especially for the family and friends of the person killed. To put that figure in perspective, I point out that it is higher than the total of 263 drug-related deaths in Scotland in that year.
Nothing can put matters right after a fatal accident. That is why our first and overriding aim has to be, as far as possible, to prevent such accidents occurring in the first place. The Government are therefore committed to reducing the number of road accident casualties in Scotland, and some considerable progress has been made.
In 1987, the target was to reduce casualties by a third by the year 2000, compared with the average for 1981–85. By 1997, the number of deaths in Scotland had


fallen by 41 per cent., and the number of serious injuries had fallen by 51 per cent., despite substantial growth in road traffic. In fact, Scotland's road fatality rate is about 40 per cent. below the European Union average.
Our record is therefore good by international standards, but it is not good enough and we intend to do better. We must continue to drive down the number of casualties and we have already announced that we shall publish later this year demanding new casualty reduction targets for the period up to 2010, together with a strategy for achieving them.
Obviously, the behaviour of drivers is a major factor in road accidents. For example, speed is thought to be a factor in about one third of all road accidents, but research has shown that it is the norm among many drivers to exceed the speed limit by up to 10 mph. We believe that it is necessary to change drivers' attitudes to speeding. The long-term aim must be to ensure that speeding is stigmatised, in the same way that drinking and driving is now considered to be socially unacceptable. There is no doubt in my mind that the culture has to change, and reasonably quickly.
Measures to reduce further the number of drink-related road casualties, on which we consulted last year, will be announced in the context of the forthcoming road safety strategy. That strategy will also take into account the findings of the Great Britain review of speed policy, which is currently under way.
A driver behaviour strategy has been developed to modify drivers' attitudes, with the ultimate aim of reducing casualties. Tackling the problem of speeding will be a major component of the strategy, and a publicity campaign called "Full Speed" was launched in November last year. Because it is a long-term initiative, it will be some time before its effectiveness can be assessed.
My hon. Friend the Under-Secretary of State for Scotland with responsibility for transport has also launched the first of 75 pilot 20 mph projects throughout Scotland. In residential areas used mainly by the people who live in them, the projects will test the effectiveness of schemes that do not include the use of relatively expensive engineering measures.
We are also making special efforts with driver training to cut accidents and casualties involving newly qualified drivers. Drivers in the 17 to 21 age group represent less than 10 per cent. of licence holders, but sadly are involved in about 20 per cent. of all road accidents in which injuries are sustained.
We are also taking various action on driving tests. In addition, we shall continue our hard-hitting television publicity campaigns to drive home the message that speed kills and that motorists should not drink and drive. Moreover, we are setting challenging targets for reduction in many areas of road activity.
I am grateful to my hon. Friend the Member for Cumbernauld and Kilsyth for raising these matters today. I assure her that the Government will keep this area of law under constant review. Above all, we need to take practical steps such as I have described to reduce the incidence of deaths on our roads. Everything that has been said today underlines our commitment to further improve safety.
Finally, I hope that the tragic death of Steven Dekker will lead us to renew once more our efforts to make Britain's roads safer and to minimise future loss of life on them.

House Building (Avon)

1 pm

Mr. Steve Webb: I have been asking myself what the worst ministerial job in Government must be. Until recently, I assumed it was the job of junior transport Minister, someone who must spend his or her time, often in the early hours of the morning, responding to hon. Members who either want a ring road or bypass or desperately do not want one. However, it strikes me that even worse is probably the job of the Minister—who will shortly join us, I hope—who has to respond to housing debates. In a series of debates, hon. Members of all parties have recognised the need for additional house building, but said that none of it should happen in their constituencies.
Having said which, I make no apology for raising the subject of house building in the former county of Avon. It is probably one of the biggest issues impacting on the quality of life of the people represented by the hon. Member for Bristol, North-West (Dr. Naysmith), who is present for this debate, and by me. While the scope of the debate is the whole of Avon, I shall be parochial for a moment in outlining three development threats in Northavon that illustrate why I sought the debate.
First, it is possible that ICI land on Severnside, for which planning permission for industrial development dating back to the 1950s exists, might be turned over to residential development. That could double the size of the adjoining village, Pilning. Pilning and Easter Compton are distinct villages with distinct characters, but they could become one sprawling housing estate, and that would be highly unwelcome.
Secondly, there is a threat of further development north of Yate, which would add to already extensive house building, taking up scarce green-field sites. Finally, there is a new threat to the area north of Thornbury, where developers are believed to be eyeing up farmland even as we speak, not least because of the weakness of agriculture. Few farmers, given the opportunity to sell their land for mass house building and a substantial profit, would be able to resist when the alternative is the very meagre income that many of them earn.
I congratulate the Government on ending the numbers-driven predict and provide approach that has characterised housing development in recent years. Let me give an example of the absurdity of that strategy. Projecting populations over 20 years is difficult. Projecting regional populations is even more difficult. When it comes to sub-regions such as the former county of Avon, it is frankly absurd, and it produces bizarre results.
The joint strategic planning and transportation committee of the former Avon authorities produced a document after receiving projections from the Office of Population, Census and Statistics, based in 1993, for the sort of people who would move into Avon. The OPCS said:
The projections for the Avon area say that out of the net migration into Avon, 0.4 per cent. would be female and 99.6 per cent. would be male.
I shall not remark on whether all the football teams in the area are a reason why all those men should flood in, but it is clear that those figures are absolutely absurd.
The figures were produced by a process of iteration. Statisticians know that the total migration around the country must add up to zero, and they have certain views about what determines flows from one area to another. They try to tweak the numbers until all totals add up to zero and all prior assumptions are satisfied. That produces frankly barmy statistics.
If the problem were merely a statistical nicety, we could ignore it and move on. However, the gender balance of those who move into an area affects house building projections. It is assumed that men have a faster rate of forming households, or form more households, than women. Were we still driven by numbers, those figures could mean real houses in real fields in my constituency. I am pleased that the Government have dropped predict and provide.
South Gloucestershire has borne the brunt of additional house building in the Avon area in the past. Since the late 1980s, out of the four unitary authorities in the former county of Avon, South Gloucestershire has taken the largest share of new house building in every single year. It would be a travesty if the area that had rapid growth in the past was therefore deemed able to cope with rapid growth in future. The houses have come, but the infrastructure has not come with them. Huge development has come, first at Yate, then at Bradley Stoke, now at Emersons Green. Some time, a limit must come. The infrastructure must be given time to catch up.
On the face of it, one would assume that the disused Hortham hospital site would be a natural for housing development. It might be assumed to be just the sort of site on which people like me would want new houses to be built. However, the site illustrates our infrastructure problems. The 250 houses planned for the site, to which the local authority may give the go-ahead, will mean yet more congestion on the A38. It is already overcrowded, and local residents will tell anyone it is more like a car park than a road. Unless infrastructure is given time to catch up, areas such as south Gloucestershire will have great difficulty in coping with planned additional house building.
What can be done? Government action is already under way in three areas, but I would like to see more being done to reduce the pressure for new house building on green-field sites, particularly in south Gloucestershire. First, let me touch on the use of empty properties. The Bristol Evening Post recently highlighted the 5.500 empty properties in Bristol alone. A Friends of the Earth spokeswoman said:
Empty homes are neighbours from hell—because they bring down an area.
That is true.
The Minister for London and Construction kindly ensured that I was provided with a written answer in time for this debate, which identified no fewer than 13,000 empty properties in the former Avon area. Compare that number with the 3,000 or 4,000 new houses that are built in Avon each year. If only one third of the empty properties could be returned to use, we might have a year without new house building. Matters are not that simple, of course, but that is the scale of the problem.
Reducing void rates and empty rates is feasible In Holland, the empty property rates are closer to 2.5 per cent. than to our 4 per cent. That 1.5 per cent. of difference would make a substantial impact in my area.
First, let me make a radical suggestion. I propose that house builders be told that they can build no new houses in the next 12 months, but must devote all their attention to setting about some of the 13,000 empty properties in Avon. They will be told that they can have permission to build in certain areas subsequently, but that, for 12 months, all their refurbishment and building skills must be put into doing up existing properties. If that proposal were on the table, it would concentrate minds wonderfully. I am sure that empty properties are a national problem, but the numbers in Avon are clearly substantial.
Secondly, can the Minister reassure me on the sequential development test, a Government measure that I welcome, but which I would like to have more teeth? As I understand it, go-aheads will not be given for development on green-field sites unless developers show that they have first considered alternative brown-field sites.
I am not sure precisely how that will work. My constituency has few brown-field sites. Does a developer who wants to build thousands of houses on the outskirts of, say, Thornbury merely have to say that he has exhausted brown-field sites in Northavon? Would the relevant area be south Gloucestershire, or the former county of Avon, or the south-west? What is the test, and how high is the hurdle?
Would developers be able to say that they had considered a site, but that it would cost too much to clean up? That would not be good enough. If sites can be developed appropriately for new housing, but with, perhaps, a smaller profit margin, I do not believe developers should be able to get away with not using them. I should be grateful for some assurance that real teeth are being put behind the test.
Thirdly, there is the tax anomaly. As the Minister knows, someone who wants to do up a rundown or empty property has to pay VAT at 17.5 per cent., whereas someone who wants to build a new house on a green-field site faces no similar tax burden. That cannot be right; it gives all the wrong incentives. Why not have a tax on green-field sites? I believe that one is under consideration, but my constituents say, "House building is going on now. How long will we have to wait for the tax incentives?"
The tax revenues from such sources should not be used as a milch cow for the Treasury, but should be recycled into urban development. We make a serious mistake if we view the issue as one of town against country. One of the merits of examining the problem on an Avon-wide basis is that the result can be a win-win situation. The proceeds from development in rural areas could be used, partly for infrastructure to support those developments, but also for the rejuvenation—I believe that the word now being used is "renaissance"—of urban areas.
Although many people want to live in the country, in villages and in suburban areas, many people, especially students and other young people, want to live in towns, where the life is and where things are going on. They do not mind living in flats above shops in the city. If we could make life more palatable for such people, and revive the urban areas, we would do the whole community a favour and avoid setting the countryside against the town.


As for the way in which green-belt policy affects the south Gloucestershire area, it has been pointed out to me that the green belt that surrounds our area is very thin—more of a loop than a broad band. Although it prevents some of the immediate sprawl, it intensifies the pressure for development on the other side of it, because that area is within easy travel-to-work distance of the towns.
There tends to be substantial economic and residential development at the centre, a thin green band and then yet more houses on the other side of the green fields. The bizarre result is that mass car journeys are made across the green belt. I am not clear what the straightforward answer to that problem is, but green-belt policies in other areas have avoided that loop problem, which leads to the leaping of the green belt. I would be interested in the Minister's reflections on that subject.
Unless measures such as those that I have described, on which the Government are beginning to take action, are put in place, the issue will not be simply that tens of thousands of homes will be built in Avon over the next few years. What will happen after 2016, or after 2021? Will the numbers continue to rise inexorably, and, if so, will there be anything left of the green spaces that make south Gloucestershire such a special place?
This week, a resident of Thornbury wrote to me to register her objections to the plans to build hundreds of homes on the outskirts of the town, in the following terms:
This sort of development would not only destroy the character of Thornbury, but would stretch local resources to breaking point. As you know, the schools are already full, parking is difficult and traffic congestion in the rush hour is atrocious. In the morning rush hour I can walk from Morton Way roundabout to the A38 faster than you can drive that distance in a car, and the exhaust pollution is horrendous. An increase of local housing on this scale would also have serious consequences for the already badly congested A38 towards Bristol.
My constituent identified the infrastructure problems that I have described. She continued:
It is vital that the boundary of the town as set out in the various Plans is not altered and that such development is not allowed. I hope you will do everything in your power to ensure this.
As the Minister knows, my powers on such matters are rather limited—but I have had the opportunity and the privilege of raising the issue before him and before the House today. That is one thing that I can do.
I ask the Minister for two assurances. The first is that when decisions are made about where houses are to be built—we recognise that houses have to go somewhere—local people's views will be respected as far as is reasonably possible, and will not be overridden, as too often happens, by central Government. Secondly, will the hon. Gentleman assure me that he and his colleagues will build on—if that is the right expression—and accelerate the work that they have already done to reduce the growing pressures for house building? Even as we speak, developers are eyeing up the green fields of my constituency, and if we delay, it may be too late.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I start by offering a most sincere apology to you, Mr. Deputy Speaker, to the hon. Member for Northavon (Mr. Webb) and to the whole House for not having been present for the start of the debate. Unfortunately, I thought that it was due to start at

1.30 rather than 1 o'clock. That was an error for which I accept full responsibility, and I would like to make clear to the House my regret that I was not here earlier.
I congratulate the hon. Member on securing the debate. It is on an important subject, which has been raised before by many other hon. Members. I spoke on the subject of house building requirements only two weeks ago, during a debate secured by the hon. Member for Tewkesbury (Mr. Robertson), the hon. Gentleman's relatively near parliamentary neighbour.
Household growth is a major issue facing society today. Some people may like to believe that it can be wished away, so that no new houses will need to be built, but that is not realistic. Society is continuing to change and evolve whether we like it or not, and new requirements for housing are part of that process. The Government have to accept that, and to respond appropriately.
As the hon. Gentleman was not present for that most recent debate on house building, it may be helpful if I start by explaining how the household projections are arrived at, and how they are translated into development plans.

Mr. Webb: The Minister is right to say that I was not present for the discussion about Gloucestershire, but I have read the Hansard report of it, so I do not want the Minister to duplicate what he said then.

Mr. Raynsford: I am grateful to the hon. Gentleman for telling me that, and I shall make a brief reference to the subject, rather than going into all the details.
The number of new households projected to form in England over the 25 years between 1996 and 2021 is about 3.8 million, compared to the 4.4 million projected for the 25-year period ending in 2016. The figure of 3.8 million is principally derived by projecting previous patterns of population change and household formation, and should not be seen as a forecast or estimate. It is based entirely on what might be expected to occur if previous trends continued, and is heavily dependent on the assumptions involved.
Such trends can and do change. The current suggestion is that the pace of household growth may be slowing down. Part of the underlying reason for that is that recent evidence has shown that cohabitation is increasing faster than expected, and a smaller proportion of women are widows or divorcees.
However, we must not think in terms of numbers alone. We are keen to focus the debate on how we should plan for future homes in a sustainable way. Our consultation paper, "Planning for the Communities of the Future", which we published last year, sets out the results of our analysis of the system for calculating and providing for the country's housing needs that we inherited from the previous Administration. It also explains our strategy for promoting more sustainable patterns of development and encouraging urban renewal.
We seek to ensure that where development is needed outside or adjacent to urban areas, it must be sustainable and must be combined with an active approach towards the protection of the countryside. Those proposals represent a comprehensive approach to meeting housing needs well into the new millennium. They differ from the previous system, which has been seen as essentially top down, inflexible and wedded too rigidly to the principle of predict and provide.


We have also changed our approach to establishing housing numbers by region. The new draft PPG11 on regional planning, which sets out our proposals for improving the preparation and content of regional planning guidance, represents an important step in modernising the system, and reflects our commitment to decentralised decision taking and integrated policy making designed to achieve sustainable solutions.
The new arrangements give greater responsibility to local authorities, through regional planning conferences, in preparing regional planning strategies. They should result in increased regional ownership of both the figures and the policies and in increased commitment to their delivery. Instead of Government, the regional planning authority will be responsible for preparing the draft regional strategy, including proposing the amount of additional housing needed in the planned period.
We recently announced household projections for each of the Government office regions. They should be treated not as forecasts or predictions, but as indications based on recent trends. Other factors should equally be taken into account so that regional planning bodies should, against the background of need and capacity, take a realistic, responsible approach to planning housing provision. We realise that similar information at sub-regional level, for example in the hon. Gentleman's region, could also be useful. The preparation of relevant figures will proceed so that we can make them available as soon as possible in a form consistent with that published as part of the last set of household projections in 1995.
One of the key tasks of the new regional planning guidance will be to provide guidance on the overall level of housing and its distribution within the region, making full use of previously developed land. In assessing the housing provision required for the 15 or 20 years covered by the strategy, we expect the regional planning body to work with other regional stakeholders to establish the level of housing required to meet the region's housing needs. In making that assessment, the Government's latest published household projections should be considered. Urban capacity studies should be undertaken to explore the implications of changing policies and standards that would reduce the land-take of new development while securing attractive residential environments.
Against that background of need and capacity, the regional planning body should be able to take a realistic and responsible approach to future housing provision. It must be prepared to justify its views fully in public at the examination of the draft regional planning guidance. The structure plan and unitary plan authorities will, of course, be party to that process. Once the housing requirements have been established and confirmed by the Secretary of State following the public examination, the presumption is that structure plans and unitary development plans should focus on the broad distribution and location of growth. It is the essence of the plan, monitor and manage approach that we now advocate that both the assessment of housing requirements and distribution within the region should be kept under review. If there are signs of under or over-provision, we expect both RPG and development plans to be reviewed accordingly.
On the position in the former county of Avon, RPG figures were agreed by the authorities in the region in 1994. They stated that 59,000 extra homes would be

required in the county between 1991 and 2011, based on the 1989 household projections. After allowing for dwellings completed between 1991 and 1996, 44,100 additional dwellings remained to be provided between 1996 and 2011. The replacement structure plan proposes 43,000 new dwellings over that period. The plan was subject to public scrutiny at an examination in public last month under an independent panel. Officials from the Government office of the south-west attended, and emphasised that greater account should be taken of the need to focus new housing and other development on urban areas to achieve higher densities and maximise opportunities for reusing previously developed land and buildings. I know that those instincts are in line with those of the hon. Gentleman. The panel's report is being prepared, and I am sure that he therefore appreciates that I cannot comment further on the issues or speculate on the outcome.
The consultation draft of the south Gloucestershire local plan was published in 1997. My officials in the Government office of the south-west made several comments on it on behalf of the Secretary of State. Many of them raised questions about the plan's overall strategy and the extent to which sustainable development will be secured under it. Those concerns included the amount of development proposed on green-field sites and the relatively low density of new housing proposals. South Gloucestershire council is considering its response to those and other comments, as well as awaiting the outcome of the public examination of the structure plan before publishing the deposit version of the plan.
The way forward lies in building on the positive options for meeting housing requirements and protecting the countryside. There is more common ground than is often acknowledged. We all want as much land recycling as possible and more sustainable patterns of development. We all want to protect the countryside, regenerate our urban areas and ensure that people are properly housed. We are trying to develop that agenda as proactively as possible, and much more work needs to be done to help local authorities to achieve that.
The hon. Gentleman raised some specific issues that I wish to address. He is particularly concerned about the number of empty properties. He knows that the Government attach great importance to bringing such properties into use. I am pleased that Bristol city council has developed an empty homes strategy that has won awards and attaches considerable importance to action to bring empty properties back into use. We want that taken forward.
The hon. Gentleman mentioned sequential development and the importance of emphasising the opportunities for developing brown-field sites before green-field sites. He knows that our recently published revised PPG3 stressed the importance of a sequential approach. It is not always possible to apply a strict sequential test because there will be circumstances where the needs of rural communities require development that could be satisfied only by the use of a green-field site. In that situation, provision in a distant town would not help to meet the needs of a particular rural community. The sequential approach puts strong emphasis on developing brown-field sites and recycling urban sites before considering green-field alternatives. Where the two can be treated as alternatives,


that is very much part of the thinking of PPG3, which I believe will help to concentrate minds, as it should, on the recycling of urban brown-field land.

Mr. Webb: Will the Minister clarify whether that measure has teeth? How hard will a developer have to demonstrate that he has seriously considered brown-field sites, especially if there is only borderline commercial viability, such as with sites that are hard to clean up? Could the relevant authority insist on him using such a site or can he say that it would not be worth his while?

Mr. Raynsford: That is a pertinent question. The way in which the sequential test has been applied to commercial development, particularly out-of-town shopping, shows that there has been a significant change. There will always be a tail, because planning consents are often not taken up for some years. Having said that, it is clear that developers are now focusing on urban and town centre sites rather than out-of-town sites for commercial developments because of the greater teeth available to planning authorities, and to the Secretary of State on appeal, to enforce the sequential test.
We believe that a similar principle should apply in respect of housing. Authorities should consider closely the availability of opportunities for development on recycled, brown-field land before agreeing to permission for green-field development. Similarly, the Secretary of State will adopt that approach in considering cases that are subject to call in or appeal. Without raising unrealistic hopes about turning the oil tanker round in a shorter time scale than is possible, I hope that the hon. Gentleman and the House accept that we are moving in the right direct and that this sends strong signals to developers about the importance of concentrating attention in brown-field areas.
The hon. Gentleman mentioned VAT, which is a matter for my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman will know that discussions have been continuing on the importance of measures that will encourage the regeneration of urban sites rather than allowing green-field land to be developed.
We have a full programme of revisions to existing planning policy guidance notes to pursue the matters that I have described. I mentioned the new PPG3 on housing, which is another major step in our commitment to revitalising towns and cities and protecting our countryside from unnecessary development. We are encouraging authorities to make more effective use of existing housing in all sectors by bringing empty homes back into use and tackling under-occupation.
I think that I have covered the issues that the hon. Gentleman raised. I hope that he recognises the importance of the work that is being undertaken by the Government to ensure a better, more effective approach to these vital matters.

Council Tax Benefit

Mr. Iain Coleman: The subject of this debate—which should have been titled on the Order Paper "Council tax benefit regulations" rather than "Council tax benefit regulation"—may appear rather dry and obscure to those unfamiliar with the issues, even by the standards of Back-Bench Adjournment debates. However, I am acutely conscious of the concerns and the financial problems caused to some of the poorest and most vulnerable of my constituents as a consequence of the introduction of these regulations. That is why I am pleased to have the opportunity today to highlight those matters and bring them to the Government's attention.
The nub of the problem lies in a Budget measure, originally proposed by the previous Conservative Government, which limits council tax benefit for properties in bands F, G and H to the maximum available for band E properties. In effect, the measure works as a cap on council tax benefit to householders living in properties that have been given a notional high market price. I acknowledge the significant concession made by the Labour Government in March 1998, in the announcement that, although the new regulations would be introduced from 1 April 1998, all existing council tax recipients were to be protected so that, in practice, there were no losers at the point of change as a consequence of the introduction of the new measures.
That was a source of very considerable relief to many of my poorest constituents, and the calculation made by the Department of Social Security at the time was that 65,000 people, who were then recipients of council tax benefit and would have been affected, were not affected at the point of change because of the Government's concession. In my judgment, that was a good example of our Labour Government listening to, and taking on board, the concerns of Members of Parliament and others who made representations to the Minister on our fears about the implications for those who were to be affected by the introduction of those measures. As a result of the concession, 2,159 council tax benefit recipients in Hammersmith and Fulham were, in effect, protected.
Council tax benefit is, of course, a means-tested benefit and is paid only if applicants meet a range of strict criteria. In practice, therefore, it is paid only to poor people living on low incomes with very few savings. The House will probably know the details of council tax band figures, but I remind hon. Members that the figures are as follows: to be in band F, a property must be valued at more than £120,000; to be in band G, a property must be valued at more than £160,000; and to be in band H, a property must be valued at more than £320,000. Hon. Members will, therefore, understand that, in reality, the new regulations will affect only poor people living in an area where property values are high.
In spring 1998, the local government information unit produced a report that showed that not a single property in Liverpool or the city of Birmingham would be affected by these measures, but I have already informed the House that, in one small London borough, more than 2,000 households were potentially affected by their introduction.
I am aware that the Government have recently commissioned an independent research agency —PS Martin Hamblin—to undertake a study of the effects of


the introduction of the changes. I must confess that I am somewhat disappointed that that research was not carried out sooner, but I strongly welcome the fact that the contract for the new study has now been awarded.
Today, I am able to advise my hon. Friend the Minister that in Hammersmith and Fulham, since the introduction of the new regulations on 1 April 1998, 140 households have had their benefit capped at band E. In band F, 95 households were affected and, as a consequence, face an annual bill of £183.78, or £3.75 a week. In band G, 44 households were affected and face an annual bill of £367.57, or £7.06 a week. In band H, only one household was affected and now faces an annual bill of £623.24, or £11.98 per week. Those may not seem to be large amounts of money to some hon. Members, but they represent a serious financial crisis to households already struggling to live on highly restricted means-tested benefit.
I will give the House a flavour of real-life case studies that are only too real in my constituency today as a consequence of the introduction of the regulations. There is the case of a single disabled pensioner aged 77, living in Fulham in a band G property, who receives an occupational pension of £42 a week, disability living allowance and state retirement pension. Her total weekly income is £134.00. Because her council tax benefit is capped at band E, she faces a shortfall of over £7 a week that she must find from somewhere.
There is the case of a pensioner couple who recently moved into a new housing association property in Fulham because their previous private sector rented flat had been condemned as unfit for habitation and had been demolished. The property is in band G and the couple face a bill of an extra £7 a week. They told me that they have never been in debt in their 50 years of married life. They have no idea how they will find the extra money and told me that, during the winter months, they kept the heating off in all but one room to make up the difference that they are obliged to pay. Their tiny life savings have been almost entirely whittled away. They were advised—correctly—by the local citizens advice bureau that there are no other benefits available to them to meet the difference. The reality is that if they had accepted an offer of a similar property in an outer London borough, away from their children, their grandchildren and their other local support mechanisms, they would not face that extra bill. They cannot understand why they should be penalised simply because they have lived in Fulham all their lives.

Mr. Andrew Dismore: In my constituency, I have come across another anomaly in the case of two asylum seekers who shared a flat. One was entitled to 90 per cent. income support and that was passported to 50 per cent. council tax rebate; the other was receiving national assistance and, therefore, entitled neither to money nor council tax benefit. Under council tax rules, the asylum seeker on income support has now found that he is required to pay the share of council tax due from the person on national assistance. He now has a liability order for the deduction of £2.50 a week from his 90 per cent. income support. That amount is to pay for the tax due

from the person on national assistance, who never had the money to pay the council tax in the first place. Is not that a further anomaly resulting from the regulations?

Mr. Coleman: My hon. Friend makes a good point. It is true that the introduction of the new measures has revealed a range of bizarre and peculiar anomalies, which I hope will be dealt with by the consultants in their review.
My local authority has a record that is second to none in London for developing new affordable housing in conjunction with housing association partners and other agencies and organisations. During the past six years, more than 1,000 new homes at affordable rents have been developed for local people who could never afford the astronomical cost of private property in Hammersmith and Fulham. I am looking forward to opening next month one such development of 35 new homes in Ackmar road near Parsons Green in my constituency. Earlier this week, I spoke to the chief executive of Shepherds Bush housing association, which was responsible for the development of that site. In that new development, 75.per cent. of the nomination rights will go to local authority nominations.
However, Parsons Green is one of the most expensive areas in which to purchase property in the borough—if not the whole of London. As a consequence, Shepherds Bush housing association's chief executive advises me that all 35 of the properties will almost certainly be placed in band H. Therefore, anyone eligible for council tax benefit, who moves into one of those properties, will immediately be faced with an extra weekly bill of £11.98. Even before anyone has moved into that new development, the housing association has received two refusals of offers because of the introduction of the regulations.
Local families whose members have dreamed of being given the opportunity to start a new life in a new home have had that dream dashed; they are frightened of the inevitable debt that they will face because their benefit has been capped at band E. I point out that that could not happen in Newcastle, Leeds or Cardiff. It could not happen in Barking or Hillingdon.
The London borough of Hammersmith and Fulham is currently involved in detailed negotiations with the country's largest urban property developer over the Imperial wharf site in Fulham, where it is hoped that the council will eventually, in partnership with housing associations, be able to develop well in excess of 500 new affordable homes for local people. That site is also located in an area of high property prices and we are again likely to face the same problems with refusals. In effect, therefore, the new council tax benefit regulations are paving the way for the development of areas in inner London, where the poorest and most vulnerable in our society will not be able to afford to live, despite the fact that major developments of affordable housing are being built—encouraged by the Government —in those areas.
On 11 March 1999, I received a written answer to a parliamentary question in which the Minister was kind enough to advise me that no information on savings as a consequence of the introduction of the regulations last year was yet available. However, I understand that the estimate of savings in the current financial year is £4 million, to the nearest million. I respectfully suggest that saving such a relatively small sum cannot be justified when measured against the misery that the regulations have already caused.


I continue to receive letters and telephone calls from constituents who cannot understand why they have, in their view, been singled out for unfair treatment because they live in an area where their family has lived for generations. It has been pointed out to me that no one in the general election campaign mentioned that such a measure would be introduced. I am unable adequately to explain to my constituents why the Government decided to protect existing recipients of council tax benefit, but introduce such a regressive measure for new applicants.
I have a case of one constituent who, as a council tax benefit recipient prior to the introduction of the new regulations on 1 April 1998, was protected, but who was desperate to return to work after being made redundant by a local engineering company after 30 years of loyal service. He was unable to find a job as a skilled worker, but took a job as a labourer in a local building company. After four months, he injured his back and had to give up that job. Now, he finds himself trapped by the regulations in a band G property with an additional bill of almost £400 per year. He points out that if he had not returned to work he would not be in that position. He believes that the regulations act as a disincentive to those who have been protected from the regulations and who are now worried about what will happen if they become unemployed again in future.
It has been suggested that housing association or local authority tenants caught in bands higher than E should, in effect, trade down to lower-banded properties. That suggestion reveals a complete lack of understanding of the way in which social landlords now work in inner London. Almost all housing associations and local authorities operate a strict one-offer policy. Even if it were possible—which it is not—for families to move from one geographical location to another, the implications in terms of disruption to their children's education and to family support mechanisms are horrendous.
In recent weeks, we have heard a lot of nonsense and whingeing from the Opposition Treasury team about the introduction of so-called new stealth taxes. In practice, in my judgment, these regulations represent the only real stealth tax and, regrettably, they punish some of the poorest of my constituents. I welcome the fact that the Labour Government have honoured their commitment, made last year, to commission independent research into the effects of the changes to council tax benefit. I urge the Government to ensure that the review is conducted swiftly.
I am convinced by the evidence that I have gathered locally that the review will demonstrate beyond doubt that the new regulations should be abolished and that we should return to the previous practice, whereby claimants are able to receive their full benefit, whatever band their property is allocated to. At the end of the day, the regulations are iniquitous and offensive. They are clearly contrary to the Government's overall social policy objective of social inclusion, and I look forward eagerly and with anticipation to their removal, as soon as possible.

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I thank my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) for raising this subject. I welcome the opportunity to put the record straight on a very important issue and to bring the House up to date on the current position.
Our debate today is about a change to the council tax benefit regulations that resulted from a measure announced by the previous Administration. It involved restricting council tax benefit for claimants in the most expensive properties to that of band E from April 1998. As the previous Administration gave no indication that any claimants would be protected, I can conclude only that the change was intended to affect all council tax benefit claimants in bands F, G and H properties. Therefore, people in receipt of council tax benefit on 1 April 1998—an elderly widow or a jobseeker supporting a large family on benefits—found themselves faced with a drop in income if their home was in one of the higher council tax bands. I welcome my hon. Friend's acknowledgement of the beneficial effects of the transitional arrangements that were introduced alongside the change.
Whether to implement such a change was one of many hard choices that we had to face when we came to power. Council tax benefit costs were rising: the benefit currently costs £2.3 billion a year and there are 5.3 million recipients. There was an obvious inconsistency in the way in which assistance with housing costs was provided via the council tax benefit system, compared with other benefits such as mortgage interest relief, as there were restrictions on help with high rents through housing benefit and on help with mortgage interest payments through income support.
We need to get the issue in proportion, as I believe my hon. Friend has. We knew that the vast majority of council tax benefit recipients lived in lower-banded properties and would not be affected by the change, but we had been made aware by representatives of local government and other interested organisations of the likely effects of the change that would disadvantage several groups, including pensioners, large families and those living in relatively modest properties in London and the south-east, where property values are higher than those in the rest of the country.
The concerns expressed focused on the ability of people to meet any shortfall from their own resources and the ability of large families to stay together. Those were specific examples of a more general concern that the measure unfairly penalised those in London and south-east England, where property values are comparatively high and where higher-banded properties can be quite modest. We listened carefully to those concerns, and acted on them by introducing the transitional arrangements.
Before the changes took effect, we reassured all existing council tax benefit recipients by providing transitional protection so that not a single council tax benefit recipient lost out at the point of change. We also introduced a set of amending regulations that ensured that all existing claimants on 31 March 1998, who would have been affected by the change, were protected from day one. In fact, those regulations went further than simply protecting existing claimants. In cases where the main claimant leaves home, or dies, we have allowed the remaining partner to continue to receive council tax benefit without restriction, as long as he or she was also living in the home on 31 March 1998. We have also allowed transitional protection to continue if there is a break in a claim.


By introducing that protection, we have been able to help the most vulnerable groups. Elderly people are far less likely to experience changes in income and so tend to remain on council tax benefit throughout. They are also likely to be more settled than people of working age and therefore less likely to move home, so they will have been considerably helped by the change. The introduction of transitional protection also ensures that large families are able to remain in accommodation of a suitable size, and that those with a short break in their claim are not unfairly penalised.
We have been consistent with our overall plans for welfare reform in respect of those seeking and moving into work. Overall, the restrictions have provoked little complaint, although I recognise that my hon. Friend has a strong interest in the matter. He has given the House evidence of how the regulations have affected some of his constituents. I have noted all of his points and will pass them on as part of the review. We have, by bringing in these regulations, ensured that vulnerable groups such as the elderly are protected. The scheme has provoked little actual complaint, although I recognise that my hon. Friend has retained a strong interest in the matter.
At the time we introduced protection for existing council tax benefit recipients, we accepted that we should monitor the effects of the policy on those affected by the restrictions, for example, people claiming council tax benefit for the first time and those returning to benefit to whom transitional protection no longer applies. In a way, today's debate is part of that monitoring process. Our decision to conduct research was supported by the representative bodies of local government in Great Britain.
Following a competitive tender, which is one of the reasons why the process has taken so long, we commissioned PS Martin Hamblin to carry out a research project that will monitor the effects of the restriction by reference to the types of person affected, the effect on claimants payment of council tax and comparisons with the cases affected by transitional protection. Another reason for the delay has been finding people and cases to compare. Such studies cannot be set up quickly, but I assure my hon. Friend that we are getting on with the job.
In order to protect the integrity and independence of the research, I cannot say which authorities are involved in the study. However, I can tell the House that a

carefully selected sample of authorities has been invited to take part in the research to ensure that we get a proper picture of what is happening. The research will cover the first year of the restriction, and we expect it to be completed by the end of the year. That should give us an idea of what is happening nationally. As usual, a report of the study will be published by the Department, and I assure my hon. Friend that we will examine its findings very carefully.
My hon. Friend the Member for Hendon (Mr. Dismore) raised a complex technical issue to do with the interaction of asylum seekers and council tax benefits. I think the best way of dealing with that issue is to ask my hon. Friend to write to me and I will get back to him about it.
Our record in this area—including the study and the transitional protection that we have introduced—is a good example of how this Government listen to local government, Members of Parliament and others and work in partnership with them. My hon. Friend the Member for Hammersmith and Fulham expressed specific concerns about the effect of the restriction on the choices that his constituents can make if they are given the chance of being rehoused in the new or higher-quality properties that the local authority offers to larger families. We must also consider the impact of the restriction on housing for homeless families in the borough.
I appreciate the force of my hon. Friend's concerns and I do not make light of any difficulties relating to the fact that property values are generally higher in London and the south-east. We shall take that factor on board in our research. In the light of what I have said, I hope that my hon. Friend agrees that it is sensible to wait for the results of the research that we have commissioned and to gauge the impact of the restriction nationally before proceeding further.
I assure my hon. Friend and all right hon. and hon. Members who have raised this matter that I do not take their concerns lightly. As soon as the results of the research are known, we will consider carefully the effects of the regulations. I welcome any other evidence that hon. Members may wish to include as part of our deliberations so that we can take account of it in our work.

It being before Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — NORTHERN IRELAND

The Secretary of State was asked—

Good Friday Agreement

Mr. Tony McNulty: If she will make a statement on progress in implementing the Good Friday agreement. [81279]

The Secretary of State for Northern Ireland (Marjorie Mowlam): A great deal of progress has been made in implementing the Good Friday agreement. The Government have already made all the practical preparations necessary for devolution and for all the institutions set up under the agreement to go live. Talks between the two Governments and the parties continue to try to overcome the remaining obstacles. No one is hiding the fact that this is a difficult period, but it is clear that the people of Northern Ireland want to make progress and want their agreement to be put into practice.

Mr. McNulty: I thank my right hon. Friend for that response. Will she join me in welcoming the opinion poll in the Irish Times yesterday which revealed that support for the Good Friday agreement among the people of Northern Ireland is still strong and, if anything, getting stronger? Does she agree that the overwhelming majority of people in Northern Ireland want their politicians to compromise, make the Good Friday agreement work and bring a lasting peace and normal politics to Northern Ireland?

Marjorie Mowlam: I agree with the points made by my hon. Friend. The poll revealed that 73 per cent. of the people of Northern Ireland—a higher number than in the referendum — support the agreement and would vote for it. It revealed also that a phenomenal 70 per cent. of people understand that the only way forward is to compromise. I always like to have the results of more than one poll, and the good point about this poll is that the guts of it, on the major issues, support previous polls by other newspapers and institutions. There is a continuity of view on those issues.
The poll also demonstrates—we should not ignore this fact—that half the population have confidence and believe that the Good Friday agreement will be implemented, and half have their doubts, are fearful and distrusting and do not have the confidence to believe that progress will be made. It is important that we continue our work with the Irish to build that confidence to find a way forward.

Mr. David Trimble: I refer the Secretary of State to the security section in the Belfast agreement, in which the Government undertook to make progress towards normal security arrangements in accordance with a published strategy, and to consult with the parties about that strategy. When will the Government publish that strategy? Are they engaged in any consultation or negotiation on that strategy, or elements of it, with any parties? Will the right hon. Lady give an undertaking to

the House that any published strategy will eschew gimmicks and make sure that the safety of society is the overriding consideration?

Marjorie Mowlam: I shall start with the right hon. Gentleman's last point. Clearly, the safety of the people of Northern Ireland is paramount in our minds, and that will be the overriding issue. The safety of the people is the job of any Government, and it will remain a strong priority and central to anything that this Government do.
The right hon. Gentleman asks whether there has been any consultation. We have consulted the Irish, as I am sure he and others would expect. Our close working relationship with the Irish is consistent with that consultation, and it would be surprising if we had not consulted.
The right hon. Gentleman also asks whether we shall consult other parties. We shall certainly consult him, as the First Minister, and the Deputy First Minister before any strategy is published. He asks whether there is a date for publication. We are still working on that strategy, so I cannot yet give him a date, but we shall publish it as soon as we have finished.

Mr. Seamus Mallon: The Secretary of State will be aware that the Irish Times poll yesterday reveals that 69 per cent. of Ulster Unionist voters and 77 per cent. of Sinn Fein voters demonstrate an unwillingness to compromise. Given that fact and the fact that the interminable talks are getting nowhere, is it not time for the two Governments to stop playing nanny to the two parties that are holding up the agreement and to define clearly the compromises that must be made, the process through which the international body on decommissioning can progress and advance decommissioning and a date on which the Executive Committee and the institutions will come into being, without being vetoed by any political party?

Marjorie Mowlam: I share some of the hon. Gentleman's frustration with the speed at which the process is moving, but he knows as well as I do that it will not work unless we get all parties acting collectively to find an accommodation and a way forward. Therefore, as he suggests, the two Governments are working closely together to do what we can to move the process forward, but we need to do so with the parties on side, because the Good Friday agreement cannot work—decisions cannot be taken—without cross-community support. We are working on that now, and we shall continue to do so in the days and weeks ahead. I believe that there is not a party around that table that does not want to make progress and, as the poll suggests that the people want progress, it is incumbent on all of us to take a risk and keep going.

Mr. Lembit Öpik: Does the Secretary of State agree that the Irish Times poll represents very good information indeed and that, although we do not always take such polls seriously, its findings seem to fit the general mood in Northern Ireland? In that context, does she agree that although it is perfectly legitimate for politicians in Northern Ireland to represent


the 27 per cent. who oppose the Good Friday agreement, they should not use their position to obstruct the progress that has been made so far?

Marjorie Mowlam: The 27 per cent. who did not support the agreement obviously have a democratic right to continue to voice their views, but I hope that they will acknowledge the wishes of the majority that we do everything we can to help rather than hinder. We have come a long way. A lot of progress has been made. It is a difficult time, and people are getting frustrated, but if we stick in there, keep talking and do not walk, we have a chance to make it.

Dr. Nick Palmer: Most of us hesitate to intervene in these discussions from the mainland because we are reluctant to be back-seat drivers, but I believe that an increasing number of British MPs have realised that we have allowed the opponents of the agreement to hitch its success to a single aspect—the decommissioning of selected weapons — whereas, for most people, the essence is that the agreement delivers peace: the absence of hostile action by all sides. That is something which the surrender of weapons will not guarantee, and which requires further commitment from all sides. Might it not be possible to move the process forward by emphasising other aspects of the achievement of peace, which we all want?

Marjorie Mowlam: I thank my hon. Friend. I think it is clear from both sides of the House and from everyone around the table that agreement needs the support of all the parties — which is what we are working towards—and that, in addition, the whole of the Good Friday agreement must be implemented. As George Mitchell said, reaching agreement was tough; implementing it is tougher, because many people wanted one bit and not another. That is the stage that we have reached. People are looking at a host of options and ways forward.
My hon. Friend suggests that we look at other aspects and see whether that helps. What helps—an aspect that, as he suggests, might make a difference—is the building of trust and confidence, because what is needed is for all parties to realise how far we have come, for all parties to realise that people in Northern Ireland want to make progress and for all parties to ask themselves, "What can we do with the lack of trust and lack of confidence of others around the table?" I believe that if everyone did that, progress would be made.

Mr. Andrew MacKay: Does the Secretary of State accept that the two Governments have jumped every hurdle and fulfilled all their obligations under the agreement? Does she also accept that the constitutional parties, Unionist and nationalist, have also jumped all hurdles and fulfilled all their obligations, and that the stumbling block that stops an Executive being set up is the fact that the paramilitaries, republican and loyalist, are not starting their decommissioning?

Marjorie Mowlam: What the right hon. Gentleman has to do in understanding the Good Friday agreement is accept that all parts of the agreement have to be implemented. There is not a stumbling block for one side or the other because decommissioning, as we have said in the House on many occasions, is an essential part of the agreement. It is not a precondition but it is clearly an

obligation, so that has to be part of what moves forward. As I said in my answer to the main question, we are almost there in implementing other parts of the agreement. By introducing preconditions of any sort, progress will not be made. The parties must come together, with all the help that the rest of us can give them, to find a way forward.

Mr. MacKay: Surely the Secretary of State accepts that everybody else has fulfilled all their obligations, including herself. The only stumbling block is now the paramilitaries. I do not believe that it can be right in a democracy that the democratic process is vetoed by the men of violence. Will the right hon. Lady seriously consider setting up a devolved Executive without Sinn Fein-IRA, and allow them to join as and when they start to fulfil their obligations by decommissioning?

Marjorie Mowlam: If I do what the right hon. Gentleman has asked me to do, I will lose the one bit of leverage that I have, which is to implement the Good Friday agreement in full. I would succeed in destroying that agreement. I have no intention of doing that.

Inward Investment

Mr. Michael Clapham: What action is being taken to encourage inward investment in Northern Ireland. [81280]

The Minister of State, Northern Ireland Office (Mr. Adam Ingram): The continuing attraction of inward investment to Northern Ireland is vital to the growth of the Northern Ireland economy, and the responsibility for this rests with the Industrial Development Board. As an example of recent initiatives, last October, I, along with the Secretary of State, supported by the First Minister (Designate) and Deputy First Minister (Designate), undertook an intensive 11-city inward investment tour of north America. The IDB is actively building on the benefits of that investment drive.

Mr. Clapham: I thank my right hon. Friend for that answer. I take this opportunity to congratulate the Northern Ireland team on its understanding and tenacity in encouraging the Belfast agreement along.
My right hon. Friend will be aware that inward investment is extremely important in creating the jobs, opportunities and prosperity that will help to bridge the sectarian divide. He will be aware also that new industry has a priority to ensure the health and safety of its work force. Will he ensure that the new Health and Safety Executive, which was set up and launched at Stormont earlier this year, is equipped to provide the best of standards for all workers in all occupations? As many of the new industries will be moving into established premises, will my right hon. Friend ensure that some of the inspectors are trained in the health and safety aspects of asbestos removal?

Mr. Ingram: I thank my hon. Friend for his warm words with reference to what we have been able to achieve to date. I hope that his view is shared on both sides of the House because much has been achieved. My hon. Friend is right in that the more progress that is made in establishing peace, the greater will be the economic development.


My hon. Friend referred to the establishment of the new Health and Safety Executive, which took up its mantle of responsibilities from 1 April. I take note of what he says about the training of inspectors. It is right that inspectors should be trained to deal with everything that they are likely to face in carrying out their duties. I shall ensure that that message is taken on board by the executive. Of course, if we have implementation of the Good Friday agreement, it will become a devolved issue for the new Assembly.

Mr. John Bercow: What research is being conducted by the Minister's Department to establish the relative importance of labour market flexibility and the use of the English language in the attraction of inward investment to Northern Ireland?

Mr. Ingram: I do not know whether we have undertaken any specific research. I shall certainly engage in some research to ascertain whether we have done any research and to see whether there is anything to be gained from such research. I think that it is well known that one of the specific areas of potential inward investment is the English-speaking world, primarily north America. That is why we targeted that market. I am not so sure that research would prove that we need to do more in that context because we have expended a great deal of effort in seeking to encourage inward investment.
As for the flexibility of the labour market, we market Northern Ireland on the basis of its human resources and its commitment, in all sections of the community, to the work ethic. The people of Northern Ireland want peace but they also want jobs.

Mr. Eddie McGrady: I thank the Minister for his earlier encouraging remarks on inward investment and draw his attention to the completion of a new business park in Downpatrick, in the north of the South Down constituency. According to the strategic plan for the next 10 years, the population of the area, which already has high unemployment, is destined to double. What specific and special action does he anticipate the Government taking to attract inward investment to the area, and to publicise and market the new business park? The area's visitation ratio over the past 10 years has been low.

Mr. Ingram: We seek to encourage among companies coming into Northern Ireland maximum interest in considering areas such as Downpatrick, which undoubtedly has major potential in a variety of ways—not only for industrial growth, but for tourism. I compliment my hon. Friend on all his efforts on behalf of his constituency and to ensure that people are aware of the importance of inward investment for that area. We do our best in marketing and encourage as many companies as possible to consider coming to Northern Ireland, but it is for them to make their investment decisions, although we may put attractive packages in front of them to attract them to areas such as Downpatrick.

Mr. Jeffrey Donaldson: The Minister will be aware that spiralling fuel costs in Northern Ireland are a major deterrent to inward investment. We welcome the announcement that I understand the Government have made about considering compensation to petrol retailers

who are suffering as a result of smuggling. Will he meet the Northern Ireland regional representatives of the Road Haulage Association and the Freight Transport Association to discuss the impact of increasing fuel costs on the industry's ability to provide an effective transport service to businesses in Northern Ireland and to potential inward investors?

Mr. Ingram: I thank the hon. Gentleman for his welcome for the Government's announcement; it is always nice to hear such a welcome from him. The Government's approach has been to listen and to try to find the best way forward. I have agreed to meet the Petrol Retailers Association, and I would not be averse to meeting other interested lobby groups so that I can articulate their views to the appropriate Department. However, these matters do not rest with the Northern Ireland Office, but with the Treasury.

Decommissioning

Mr. Nicholas Winterton: What recent representations she has received on when the decommissioning of illegally held weapons and explosives will begin. [81283]

The Minister of State, Northern Ireland Office (Mr. Adam Ingram): The Government continue to meet representatives of all the political parties to discuss all aspects of the Good Friday agreement. The Independent Commission on Decommissioning continues its discussions with the representatives of the various groups. All sides must honour all the commitments they made in the Good Friday agreement, and the Government are determined that all aspects should move forward in parallel.

Mr. Winterton: Does the Minister accept that Senator Mitchell, whom the Secretary of State mentioned in an earlier answer, said nearly three years ago that all paramilitary groups were committed to decommissioning and to peace? Does the Secretary of State accept that confidence in the peace process will not be encouraged if there is any question of Sinn Fein-IRA joining the Executive in Northern Ireland before there is credible and verifiable decommissioning? Does she further accept that many people believe that she will throw away all her negotiating cards if she continues to release convicted terrorist murderers from prison?

Mr. Ingram: I understand the hon. Gentleman's strong views on this issue, but he should have listened to some of the previous questions, which concerned what is deemed to be the current mood of people in Northern Ireland and what they want in respect of the implementation of the Good Friday agreement. We would not rest on one poll, but we have assessed the support for the agreement and the determination of the people of Northern Ireland for all aspects of it to be implemented. We have put in place many of the mechanisms to assist decommissioning. The independent commission will take forward any submissions or proposals from those who hold illegal weapons for disposing of them for the better and greater good of Northern Ireland.

Mr. Harry Barnes: Is not one option, which is not in front of us, parking the setting-up


of the Executive until autumn or even 12 months' time? Does my right hon. Friend agree that, given that moves need to be made, we should establish the Executive even when decommissioning has not taken place, excluding Sinn Fein until it comes on board, because the IRA is engaged in that project?

Mr. Ingram: My hon. Friend makes a valid point about the possible implications of parking the agreement. That is why the Government seek to do all that they can to continue the discussions and to keep momentum in the process. The talks in which the Government are involved are all about seeking to implement all aspects of the agreement. That is what the talks between the individual parties—bilateral, trilateral and multilateral talks—are all about. It is for the parties themselves to address the issues that continue to divide them. That is how we can begin to move this whole process forward. We must continue to talk, rather than encourage people to walk.

Rev. Martin Smyth: A recent opinion poll showed that the bulk of the people wanted decommissioning. Is there evidence of any democratic country having in government parties supported by armed terrorism? Is it not a fallacious road to travel to discuss normalisation, equating the weapons of terror with the weapons of the state?

Mr. Ingram: We have to make sufficient progress on all aspects of the Good Friday agreement. No one in the House would disagree that illegally held weapons should be decommissioned. The normalisation process, as the hon. Gentleman defined it, is not about equivalence of weapons. We must look at how we can move the process forward, which means that everyone must look at fresh ideas to see how we can bring about a lasting peace in Northern Ireland. I would encourage the hon. Gentleman to start to talk the language of success and peace, rather than looking at the dark side and the downside of what is happening.

Mr. Dale Campbell-Savours: My right hon. Friend might recall that at the last Question Time, I asked him about the purchase of decommissioned weaponry from the paramilitary groups, and the Secretary of State said that she would refer the matter to the decommissioning commission in Northern Ireland. Can my right hon. Friend report any progress on that matter?

Mr. Ingram: The progress of which I would advise the House is that that matter has been referred to the independent commission. It is considering it, and it is a matter for the commission.

Mr. Malcolm Moss: Given that Sinn Fein-IRA and some of the loyalist paramilitaries have said on more than one occasion that they have no intention of decommissioning their arms, is not a halt to the release of prisoners long overdue, as we have been saying since the end of last year, until the paramilitaries honour the obligation to begin the decommissioning process?

Mr. Ingram: The Secretary of State is empowered to make judgments about the quality of the ceasefire and whether the IRA and other groups associated with the talks are still on ceasefire. The hon. Gentleman should reflect on whether he wants the Good Friday agreement to work or to fail. By being so stark in his choices, he would lead us down the road of failure. The Government are determined to succeed and will build on what the previous Administration sought to do by talking to those parties as well.

Pensioners

Dr. Doug Naysmith: What measures she is taking to assist pensioners in Northern Ireland. [81284]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. John McFall): In line with the long-standing policy of parity between Great Britain and Northern Ireland in social security matters, pensioners in Northern Ireland benefit fully from the Government's strategy to provide effective help for today's pensioners, including the introduction of the minimum income guarantee and winter fuel payments. They will also share in the Chancellor's £1 billion pensioner package.

Dr. Naysmith: I thank my hon. Friend for that reply. Is it possible to estimate the number of pensioner households in Northern Ireland that will benefit from the Chancellor's recent Budget package?

Mr. McFall: I thank my hon. Friend for that question. There are 250,000 pensioners in Northern Ireland, and each and every one of them will benefit from the Chancellor's package. With the changes in income tax, 200,000 out of 250,000 pensioners in Northern Ireland will not pay income tax. That is good news for the country, and good news for the pensioners in Northern Ireland.

Mr. Clifford Forsythe: Does the Minister know that one in four pensioners in Northern Ireland are on income support? Although there is parity of benefits in Northern Ireland, unfortunately the price of food and fuel for everyone, including pensioners, is much dearer. In addition, there is no concessionary travel in Northern Ireland. Will the Minister please take notice of the report of the Transport Sub-Committee, which was published today? It suggests a national concessionary fare across the whole of the United Kingdom perhaps helped by local authorities.

Mr. McFall: I thank the hon. Gentleman for that question. I take his point about the number of pensioners in Northern Ireland on income support. The Government introduced the minimum income guarantee. The minimum income is £75 a week for single pensioners and £116 a week for couples.
The Department of the Environment, in conjunction with a number of district councils, is examining pilot schemes for free concessionary travel.

New Deal

Mr. John Grogan: How many people have started the new deal programme in Northern Ireland. [81285]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. John McFall): By the end of March 1999, 12,788 people had started the new deal programme in Northern Ireland.

Mr. Grogan: I thank my hon. Friend for that reply. What role is the voluntary sector playing in the new deal in Northern Ireland, particularly given the widespread anxiety in that sector about the reduction in the extremely important action for community employment programme? Can the new deal help to plug that gap?

Mr. McFall: I thank my hon. Friend for that question. That has been a matter of concern to me from my first day in office in Northern Ireland. As a result, I have established a cross-departmental dedicated team to write to and contact all the 188 ACE groups in Northern Ireland. My hon. Friend will be glad to hear that, only this week, I have sent letters saying that the Secretary of State has approved an extra £10 million this year for voluntary and other groups for the transfer from ACE to new deal.

Mr. Roy Beggs: I welcome the Minister's statement that most ACE groups have been assimilated into the new deal. Will he assure us that ACE groups that have not been so will be contacted by those implementing the new deal to ensure that no one misses out? Is not the most successful achievement of the new deal the fact that those who have been doing the double have been flushed out, and we have managed to reduce the numbers registering unemployed?

Mr. McFall: I thank the hon. Gentleman for that question. Only a few months ago, 60 ACE programmes signed up with the new deal. After intensive efforts by the dedicated team, there are now almost 160. Only 18 ACE groups have not been transferred. My officials across Departments are daily involved in negotiating with ACE groups. They provide me with a weekly report on progress. The permanent secretaries in Northern Ireland Departments intend to provide the Secretary of State with a progress report every fortnight. I hope the hon. Gentleman agrees that we are taking this matter seriously. ACE groups are being contacted, and we have met their concerns with the extra finance and resources that the new deal will provide.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Engagements

Ms Julia Drown: If he will list his official engagements for Wednesday 28 April.

The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Ms Drown: In the light of the recent bombings in Brixton and the east end, will my right hon. Friend send

a clear message from the House that this country is proud of its multicultural communities, and values the huge contribution made by members of ethnic minorities to business, culture, and much more? Will my right hon. Friend also assure the House, first, that the Government will do all that they can to protect the communities that are threatened by these vicious right-wing groups, and, secondly, that they are determined to fight the racism from which the violence flows?

The Prime Minister: The attacks have been attacks not just on the Afro-Caribbean and Bangladeshi communities; we regard them as attacks on the whole of British society. [HON. MEMBERS: "Hear, hear."] We are resolved, and I believe that the British people are resolved, to show utter determination in defeating the scourge of racism.
Let me say two more things. First, I congratulate the police on pursuing their investigations with the utmost vigour. Secondly, we can be proud of the way in which the communities in Brixton and Tower Hamlets—whatever their background—have come together to condemn these outrages, and to give the police every assistance.

Mr. William Hague: I entirely agree with what has been said by the Prime Minister and by the hon. Member for South Swindon (Ms Drown). I went to Brick lane on Monday, and what the Prime Minister said is absolutely correct.
May I reiterate the Opposition's support for the NATO action in Kosovo? Does the Prime Minister agree that, although it is deeply distressing when civilians are hurt and killed—as has happened again—President Milosevic must not think that those tragic consequences will weaken our resolve in the House of Commons to ensure that the NATO action succeeds? Will he comment on this morning's reports that there are difficulties over the implementation of an oil embargo, particularly the legal basis for it? Does he agree that the rules of engagement, and their basis, must be absolutely clear?

The Prime Minister: I certainly agree with the latter point. Of course the rules of engagement must be legally clear: that is why NATO is currently studying the best way in which to implement the embargo. Let me point out, however, that the European Union has agreed an oil embargo, and that the European Union associates—which include Serbia's neighbours, and countries such as Cyprus—are already associating themselves with it. The United States, contrary to some reports, is implementing a comprehensive trade ban that includes oil. We in this country will do all that we can to ensure that the economic sanctions imposed on Serbia are effective, and that no oil gets through to the Serbian military.
As for the events that occurred overnight, we take every single precaution that we possibly and reasonably can to prevent civilian casualties. We deeply regret them when they occur; but they are not the only tale of casualties overnight. There are also the 200 Kosovar Albanian men who were massacred in a village near Djakovica, adding to earlier reports of the previous killing of some 470 men in the same place.
The difference, quite simply, is this. Whenever there are civilian casualties as a result of allied bombs, they are by error. We regret them, and we take precautions to


avoid them. The people whom the Serb paramilitaries are killing are killed deliberately. That is the difference between us and them.
We must carry on with this action, utterly united, utterly resolved to see it through to a successful conclusion.

Mr. Hague: While I agree with the Prime Minister's last point, some concerns have been expressed that an oil embargo would be legal under international law only if it were introduced on an essentially voluntary basis, and that, if it is only voluntary, it will not be effective. There are reports that many countries have agreed to an embargo—the Prime Minister has just reiterated that—but that Russia has not agreed to it, and that it may be easy to get round it. How effective will it be if it is not a complete embargo?

The Prime Minister: The simple answer is that it will be as effective as we can possibly make it, consistent with proper rules of engagement and international law. I should point out to those who raise Russia specifically that the sea is not the only route for oil into Serbia, and that Russia is not the only or even the main supplier. Therefore, there is a very great deal more that we can do. We have some experience of enforcing these types of embargoes in different parts of the world, and I believe that that experience will be well used in this case.

Mr. Hague: Finally on Kosovo, on the question of ground troops, last week, Government sources said that NATO would not consider the option of a ground operation for another four to five weeks. Yet is it not the case that the length of time required to assemble and deploy troops, and then to allow the refugees to return before the winter, means that any decision on the use of ground troops would have to be made in the very near future—in the next couple of weeks? Therefore, is it not true that, if we want to take up that option, time is running out?

The Prime Minister: It is certainly right that time is a factor; but it is for precisely that reason that NATO charged the Secretary-General of NATO and NATO planners with reviewing and updating all assessments and all options. That is what we agreed at the NATO summit, and that is what is now being done.

Charlotte Atkins: Will the Prime Minister congratulate our young United Kingdom chess players, who have won so many world titles and records recently? Does he agree that the best way of making the United Kingdom the top chess nation in the world is to recognise chess as a sport, and to end the discrimination of United Kingdom chess players, who suffer from lack of training facilities, lack of finance and very little organisation of chess games in schools? Is it not time that we joined the 100-plus nations of the world that already recognise chess as a sport and fund it accordingly?

The Prime Minister: It is at a moment like this that I look along the Front Bench in search of inspiration, but do not find any. [Interruption.] Yes, I have just located the inspiration, but, unfortunately, she is rather far away

from me. My hon. Friend's comments sound thoroughly persuasive. Perhaps the safest thing for me to say is that I shall make further inquiries and write to her.

Mr. Paddy Ashdown: Given that, for the first half of this Parliament, Labour adopted the Conservatives' spending plans, and that, for the second half of this Parliament, the Conservatives intend to adopt Labour's spending plans, would not voters in next week's elections be justified in concluding that, when it comes to delivery of public services, there ain't much difference between them?

The Prime Minister: I agree that the Liberal Democrats have certainly been consistent throughout: they have consistently said that they will spend more money, and more money, and more money. What they have not ever done consistently is say how all those bills are to be paid. The idea that they will all be paid with that 1 p on income tax—which, as I understand it, is not even Liberal policy any more—is nonsense. I suggest that people should vote for the party that has managed to get mortgage rates to their lowest level for more than 30 years, that has sorted out public finances, and that is now making the biggest ever investment into schools and hospitals.

Mr. Ashdown: The record actually shows that we were the only party at the general election to publish a fully costed manifesto. [Interruption.] That is absolutely correct; and, unlike Labour in opposition, we have always done so. Let us come now to the delivery — because the Prime Minister often tells us that it is not about inputs, but about outputs. Does not the record show that the right hon. Gentleman promised to make class sizes smaller, but that, for the majority of children, class sizes have become larger? He promised to bring down waiting lists, but waiting times are now at record levels. He promised to put more police on the beat, but the Government have cut the number of police in Britain. Does the Prime Minister really think that two years ago Britain voted to kick out the Tories in order to make our public services worse?

The Prime Minister: If I can just correct the right hon. Gentleman: first, we have reduced class sizes for five, six and seven-year-olds. There now are 130,000 pupils in classes of under 30 who would not have been otherwise and, for the first time, class sizes in primary schools are actually falling. We have reduced waiting lists and the right hon. Gentleman is wrong about waiting times, which we have also reduced.
As for the Liberal Democrats' costed spending plans, first, they can cost them in the certain knowledge that they will never have to carry them out. Secondly, they advocated spending less money than we are spending under our comprehensive spending review, so I suggest that people stick with their first instincts and vote Labour.

Mr. Harold Best: Will the Prime Minister join me in congratulating the Home Office staff and the staff of Leeds city council on organising the smooth transfer and accommodation of Kosovan refugees in my constituency? Is it not an example that might be followed elsewhere in the United Kingdom?

The Prime Minister: I pay tribute to the work that my hon. Friend has done in making the arrangements work and thank the people of Leeds-Bradford and the surrounding area for the magnificent way in which they have welcomed the refugees from Kosovo. That is in the very best British tradition. We will certainly be taking further refugees from Kosovo. We also are probably doing as much if not more than any other nation out there in Macedonia and Albania to make sure that the refugees are looked after properly.

Mr. Paul Keetch: Does the Prime Minister recall my letter of 18 March concerning the proposed closure of the Thorn Lighting plant in Hereford with the loss of some 348 jobs and the transfer of some of the production to the Spennymoor plant in his constituency? Given that the local authority, the chamber of commerce and the trade unions are in talks with management trying to save the Hereford plant, and given that Spennymoor gets some Government grants that the Hereford plant does not receive, will the Prime Minister ensure that there is a level playing field for both factories?

The Prime Minister: Yes, I do recall the hon. Gentleman's letter of 18 March. Of course, any proposed closure is distressing, but it is of course a decision for the company. I understand that members of the local task force are due to meet my hon. Friend the Minister for Small Firms, Trade and Industry in the next few weeks. The chambers of commerce, the training and enterprise council and the Employment Service are ready to help, so I hope that they can be of assistance to the hon. Gentleman's constituents. Although I recognise that it is no consolation to those whose jobs are under threat, it is worth acknowledging that unemployment in the hon. Gentleman's constituency has fallen by some 14 per cent. in the past year. We very much hope that we can help those who face redundancy and do everything that we can to assist them over the coming weeks.

Mrs. Helen Brinton: Further to the earlier exchange on Serbia, does the Prime Minister agree that the welcome signs of division within the Serbian regime are indeed a direct result of the solidarity shown at the recent NATO summit? Will he assure me and the House that he will do everything possible to ensure that the strength of NATO is maintained with the simple humanitarian objective of allowing the refugees to return and rebuild their lives?

The Prime Minister: My hon. Friend is quite right to draw attention to the divisions now appearing in the Belgrade regime. It was Mr. Draskovic who said to his own people, only a couple of days ago, that his fellow leaders were simply lying:
Lying to the people that any day now we are going to prevail over NATO, that NATO is about to collapse, and that Russia is on the verge of starting World War 3. But NATO has never been stronger and more homogenous".
I believe that that is a result of the NATO summit. What is important is that we demonstrate complete determination and resolve that we shall not rest until

NATO's objectives are met, and until an international military force goes into Kosovo and allows those people to return to their homes in peace.

Mr. Oliver Letwin: Will the Prime Minister guarantee that before he holds another referendum he will implement the recommendations of the Neill Committee on the fair conduct of referendums?

The Prime Minister: As the hon. Gentleman may know, my right hon. Friend the Home Secretary is due to publish a draft Bill on this matter shortly, but I point out to him that it was the Labour party that asked the Neill Committee specifically to look at these issues, after the previous Conservative Government refused to allow that. It will be our particular pride to introduce those recommendations.

Mr. Tony Benn: Is the Prime Minister aware that, although the House and the whole world is united in horror at and opposition to the ethnic cleansing and brutality by Milosevic in Kosovo, the indiscriminate destruction of the infrastructure of Yugoslavia and the killing of innocent citizens—many of whom have been long opposed to President Milosevic—does nothing in the short run to help the refugees, and that in the view of many people, including me, that destruction and killing amount to a war crime in themselves?

The Prime Minister: I simply disagree with my right hon. Friend, for the reasons that I gave earlier. However, he prefaced his remarks by saying that whole world condemned the ethnic cleansing going on in Kosovo. I simply ask my right hon. Friend what, in those circumstances, does NATO do? Do we stand by and let it happen, or do we act?

Mr. Benn: Use the United Nations.

The Prime Minister: My right hon. Friend shouts to me that we should use the United Nations. We know the reasons why the United Nations would not have given us the ability to act. Either we acted, or we stood aside and let the horror continue.
I received a letter today from the hon. Member for Weston-super-Mare (Mr. Cotter). It concerned a meeting that he attended with two women—Dr. Dobruna and Professor Kelmendi—just a few days ago. I shall read a section of that letter to my right hon. Friend. The hon. Gentleman said that the women told the meeting that although
immediate events are obviously paramount, they mentioned that even by February of this year, 45 per cent. of Kosovan villages had been destroyed, and that documentary evidence exists to support this.
I ask my right hon. Friend also to look at the statements that were made on behalf of NATO and the allied forces today, which list just some of the appalling atrocities that have been carried out by the Serb forces. My right hon. Friend should read some of the accounts from the refugees, who include young women who have been raped and abused so badly that they will never now be able to have children. Is my right hon. Friend saying that we should stand aside and let that happen, in Europe? That would be the ultimate moral outrage.

Dr. Michael Clark: Is it not true that, even though Scotland will have its own Parliament,


English taxpayers' money will continue to go north of the border, that Scottish Members of Parliament will continue to come to Westminster to vote on English matters, and that one third of the Cabinet will be Scots? Can the Prime Minister sympathise with English people who want independence from Scotland? Can he support our slogan, "No representation without taxation"?

The Prime Minister: I had not thought that that was the policy of the Conservative party—although one can never be sure nowadays, as it tends to change quite quickly. However, I say to English nationalists what I say to Scottish nationalists: England and Scotland are stronger and better off together.

Mr. Harry Barnes: In bombing Yugoslavia, what distinction is made between bombing acceptable military targets and unacceptable civilian targets, and why are factories, bridges and televisions stations included in the first category rather than the second? Surely some distinction must be made between the two.

The Prime Minister: First, and by way of example, the bridges are used to transport Serb militia and troops, and they are a vital part of keeping Milosevic's war machine going. Secondly, as I have said already, the difference is that we do all that we can to avoid civilian casualties. The casualties inflicted by Milosevic are deliberate.
We cannot yet know how many people Milosevic has butchered in Kosovo, but I warn the House that the number will be very considerable. Day after day after day we hear from refugees tales of the residents of whole villages being rounded up and shot and of hundreds of young men being taken away never to be seen again. We must recognise that the only chance the refugees who have managed to escape will ever have will come if NATO continues its action and is successful. The best and most eloquent advocates for NATO action are the refugees themselves.

Mr. William Hague: In the light of accumulating evidence about the environmental risks of genetically modified crops, mounting public anxiety and statements during the past 24 hours by Tesco and Unilever, does the Prime Minister still reject the idea that it would be sensible to ban those crops until research into them has been completed?

The Prime Minister: We are making sure that no crops or foods are available until they have been properly and rigorously tested. The right hon. Gentleman is absolutely right to say that there is concern about the subject. However, a representative of Tesco, which he mentioned and which has said that it will withdraw GM foods, said on the radio this morning:
It has absolutely nothing to do with safety or concerns about safety at all. We're well satisfied that the products we market have been exhaustively tested with regard to their human and environmental safety.
It is absolutely right that Tesco should take its own commercial decision. I have made clear the Government's position on GM foods, and we do not intend to change it.

Mr. Hague: Will the Prime Minister confirm that a day after the last time we discussed this matter on the Floor

of the House, when he said that it was necessary to proceed on the basis of the best scientific evidence, English Nature, the Government body that advises him on these matters, wrote to him? The letter said:
It is important that English Nature can be in a position to reassure the public that the technology is environmentally safe, with decisions being made on the basis of good … science. We cannot assure the public about this currently.
This month, new evidence has emerged from scientists that pollen from GM crops could spread more quickly than was previously thought. Why will the right hon. Gentleman not see common sense? Is the case not overwhelming for a ban on these crops until we have completed research?

The Prime Minister: Until research is completed, none of these crops can be made available. What the right hon. Gentleman asks for is already Government policy. He is trying to elide English Nature's concerns about biodiversity with food safety scares, and that is wrong. I am well aware that there will be a ready market for what he says in some parts of the media, but it is wrong.

Mr. Hague: It is precisely English Nature's concerns about biodiversity about which 1 am asking, and about which the Prime Minister has totally failed to answer. On his point about food retailers, does he accept that nearly all major food retailers have announced that they want to be able to sell GM-free products, for whatever reasons or motives? Is there not an opportunity there? If the right hon. Gentleman cannot see the case for reassuring the public about the crops, can he not at least see the commercial sense in ensuring that the United Kingdom preserves a GM-free source of supply, at least until the effect on other crops is known? That is what a lot of people in this country want.

The Prime Minister: First, the right hon. Gentleman said that I had not answered his question. I have answered him specifically and plainly: no crops are available and no foods are available unless properly tested. Secondly, are he and his Front-Bench team really raising the issue of tougher labelling for GM foods? When in Government, he blocked labelling of GM foods. We introduced it.
We all know what the game is, so let me say to the country that I entirely know about, understand and sympathise with people's concerns about GM foods. However, if people study properly the scientific evidence, they will have to conclude three things: first, that there is no evidence that GM foods are unsafe; secondly, that there is evidence about biodiversity and its effects; and, thirdly, that that is why we should proceed with the greatest caution and the toughest regulation, which is precisely what we are doing. It would also be sensible if, before sending a signal to the whole biotechnology industry that we shall proceed on the basis not of science but of scares, we reflected on the fact that the argument should be presented in a more balanced way.

Mr. Huw Edwards: Does my right hon. Friend agree that the National Assembly for Wales must work in the interests of all the people of Wales? Does he also agree that the only way to guarantee the


implementation of the Government's programme to build a strong economy in Wales, to invest £1 billion extra in the national health service, to raise school standards and to give all pensioners free travel within three years, is to ensure a Labour majority in next week's Welsh election?

Mr. Bob Russell: Go on, disagree.

The Prime Minister: I shall not disagree with that; I agree with it wholeheartedly. My hon. Friend is right to say that there is additional money for the national health service and for schools, a better deal for pensioners and a 20 per cent. increase in child benefit—and you only get that under Labour.

Mr. Malcolm Moss: Is the Prime Minister aware of the growing crisis in nursery education, with at least two pre-school playgroups or nursery schools closing every week? Will he confirm that it is his Government's policy both to restrict parental choice in nursery education and to throw many dedicated professional nursery school teachers and ancillary workers on the scrap heap?

The Prime Minister: That is nonsense. The Government are expanding nursery education. We have got rid of the discredited nursery voucher system introduced by the previous Government, and we are expanding child care and other provision for children at a rate matched by no other Government this century.

Dr. David Clark: May I revert to the issue of public service output and delivery, and ask my right hon. Friend whether he has seen the report that, for the second year running, Labour-controlled South Tyneside council, which he knows is in one of the most deprived areas in the country, has been adjudged the best performing local authority in England? Will he join me in congratulating its councillors, officers and other employees, and

encouraging them to continue their good work and show that a Labour local authority produces the goods, and produces the best?

The Prime Minister: I am happy to congratulate South Tyneside on its work, especially in helping young people and in education. On both counts, it stands among the best in the country.

Mrs. Cheryl Gillan: On 10 April, the Chilean Government issued decree No. 209, which suspended all flights between Chile and the Falkland Islands. Will the Prime Minister now ask his Foreign Secretary to apologise for wrongly claiming that the suspension of that air link was a purely commercial decision by the airline, and will he tell the House, and the Falkland islanders, what formal protest he has made to the Chilean Government on behalf of the islanders, who are suffering greatly because of the Government's incompetence?

The Prime Minister: We have made it clear that we disagree with the decision, and we have made representations to the Chilean Government about it. The Pinochet decision is a matter for the law, and the law must take its course. I would hope that even the Conservative party would recognise that.

Mrs. Anne Campbell: On the subject of education funding, is my right hon. Friend aware of the remarks made today by the Tory leader of Cambridgeshire county council, who said that as the Government increase the standard spending assessment for education, he will reduce the county council's contribution, so the schools in my constituency will see no benefit from education spending? Can there be any reason why anyone who cares about education would ever vote Tory again?

The Prime Minister: That is the reality of Conservative education policy. They cut spending on education that is vital for children. It is all very well for Conservative Front Benchers to say that they are in favour of more education spending—or at least some of them, I am not sure how many—but the reality on the ground is the Conservative party moving further and further to the right.

Points of Order

Dr. Liam Fox: On a point of order, Madam Speaker. May I seek your help in sorting out some confusion that has arisen over the Government of Wales Act 1998? Last year, in the other place, Lord Willoughby asked whether
the Welsh assembly will not have the power to revoke the beef bones legislation because it will be subject to joint consultation with the Minister of Agriculture?
The Minister replied:
Because the powers remain joint, the assembly alone will not be able to revoke them."—[Official Report, House of Lords, 2 June 1998; Vol. 590, c. 226.]
However, last week, the Secretary of State for Wales was asked whether
the National Assembly for Wales will have the power to (a) modify and (b) lift the ban on beef sold on the bone; and if he will make a statement.
The Minister replied:
Yes. The power under which the Beef Bones Regulations 1997 were made will be transferred to the National Assembly for Wales."—[0fficial Report, 21 April 1999; Vol. 329, c. 599.]
May we have a statement so that, a week ahead of the Welsh elections, the Government can explain the confusion arising from their Welsh devolution legislation?

Madam Speaker: The hon. Gentleman will appreciate that I cannot be called upon to assess the accuracy or otherwise of statements made by Ministers. 1 am sure that he knows how to pursue this. He may call for a statement himself.

Mr. Crispin Blunt: On a point of order, Madam Speaker. On 22 February 1999, the right hon. Member for South Shields (Dr. Clark) asked the Minister for the Armed Forces an oral question on Gulf war syndrome and claims for war pensions. He said:
The Minister will know that, according to convention, after six or seven years, the onus of proof switches against the claimant—that is, the veterans. Will he assure the House today that that will not occur in the case of Gulf war veterans?
The Minister answered:
I am pleased to confirm that his interpretation is correct on this question."—[Official Report, 22 February 1999; Vol. 326, c. 12.]
In evidence to the Select Committee on Defence this morning, the Minister was unable to confirm that that statement was correct. To some extent, he withdrew from it. He assured the Committee that he would, at some unspecified date, make the policy on compensation clear to the House. I did not believe that that was adequate. He should give a fuller explanation to the House. I told him that I would raise the matter as a point of order this afternoon. Can you advise me and the Minister of the correct procedure for correcting an incorrect answer to the House?

Madam Speaker: As the House is aware, I do not comment on the proceedings of Select Committees. I certainly do not intervene in matters of political controversy or the interpretation of ministerial statements. I have not, as yet, received a request from the Minister to make a statement today, but I feel certain that, if any inadvertent error has been made, it will be corrected at

the earliest opportunity. I am sure that Ministers will have noted my remarks and will ensure that a correction is made, if necessary.

Mr. Andrew George: On a point of order, Madam Speaker. The House will know that the marine accidents investigation branch's confidential draft report into the loss of the Margaretha Maria 18 months ago with the loss of four of my constituent's lives was leaked to the press yesterday. Leaving aside concerns about that tragic loss, the report appears to raise serious questions about the stability of all similar beam trawlers. Given the obvious anxiety in fishing communities, has the Minister responsible said whether he will make a statement?

Madam Speaker: I have not been informed of any Minister seeking to make a statement on that matter.

Mr. Tam Dalyell: On a point of order, Madam Speaker. In the light of the bombing of Surdulica, have you had a request from any Minister to clarify whether there was personal agreement by a senior British Minister about the targeting of that cotton town, or whether a system is still in operation whereby, before any NATO targeting is agreed, a senior British Minister has to be consulted?

Madam Speaker: I must tell the hon. Gentleman that I have received no request from a Minister to make a statement on such a matter. However, he barely needs reminding—nor does the House—that the Prime Minister has been at the Dispatch Box for half an hour today. It was open to many hon. Members—Back Benchers as well as Front Benchers—to put questions to the Prime Minister on that issue.

Mr. William Ross: On a point of order, Madam Speaker. Despite your previous requests for short questions during Northern Ireland questions, that did not happen today. We were in fact treated to a whole series of mini-speeches, with the consequence that we managed to reach only Question 5. Do you agree that that is quite inadequate, Madam Speaker? Is there anything that you can do to ensure that there are shorter questions and, preferably, much shorter answers front Ministers?

Madam Speaker: I am delighted with that point of order. I always urge the House to put short and brisk questions to Ministers. That is especially the case during Northern Ireland questions. I notice that we deal with very few questions on Northern Ireland issues. The hon. Gentleman is correct to say that we reached only Question 5 today.
However, Northern Ireland questions are especially difficult to handle, for the simple reason that I want to call Members from all parties in the House to put a question to the Secretary of State for Northern Ireland. That means that not only Government Back Benchers but members of the Opposition Front-Bench team must be called, as well as Members from the hon. Gentleman's party and those of other parties representing Northern Ireland. I always insist on calling as many people as possible on those questions. We are always slow with Northern Ireland questions, but I do urge Back Benchers to be rather more brisk than they have been in the past. I am sure that I shall also receive the co-operation of the Northern Ireland team on the Treasury Bench.

BILLS PRESENTED

NORTHERN IRELAND (LOCATION OF VICTIMS' REMAINS)

Secretary Marjorie Mowlam, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Secretary Cook, Mr. Secretary Straw, Mr. Secretary Dewar, Mr. Secretary Michael and Mr. Adam Ingram, presented a Bill to make provision connected with Northern Ireland about locating the remains of persons killed before 10th April 1998 as a result of unlawful acts of violence committed on behalf of, or in connection with, proscribed organisations; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 92].

Restraining and Protection Orders

Ms Bridget Prentice: I beg to move,
That leave be given to bring in a Bill to empower the courts to make orders which restrain the conduct or movements of a person convicted of certain criminal offences, for the purpose of protecting the victim of the offence; to make similar provision with respect to orders which require statutory agencies to provide services to certain persons; and for connected purposes.
When I first considered the introduction of a ten-minute rule Bill, I wanted to revisit the Protection from Harassment Act 1997 to see whether a definition of stalking is now needed. The Act does not define stalking and, having discussed the matter with a number of interested groups— including the Suzy Lamplugh Trust—it seemed that the Act itself is better for that.
I believe that part of the Act's success is due to the introduction of restraining orders that prevent the perpetrator from contacting his victim after sentence is served. Restraining orders had not originally been part of my Bill, but were added after advice from Tim Lawson Cruttenden and Neil Addison—two lawyers who also advised my hon. Friend the Member for Rossendale and Darwen (Janet Anderson) now the Minister for Tourism, Film and Broadcasting, when she introduced the original Stalking Bill as a ten-minute rule Bill in 1996. I am grateful to them for the support that they have given me with my Bill. They, too, had the support of the Suzy Lamplugh Trust and the Association of Chief Police Officers.
It seems to me and to the supporters of the Bill that, if such orders were successful in stopping stalkers from harassing their victims again, it may well be appropriate to extend them to others who might return on their release from prison to victimise their original target. It is for that reason that I want to give the courts—it must be the courts —the opportunity and flexibility to impose restraining orders on people convicted of other serious crimes.
My right hon. Friend the Home Secretary is rightly keen to redress the balance in favour of the victim. For example, that is why the Youth Justice and Criminal Evidence Bill has been so warmly welcomed. Protecting witnesses and victims while they are giving evidence is essential to ensuring that people who commit serious crimes are brought to book. However, it is equally important that they are also protected after the criminal has served his sentence.
The criminal courts have been able to impose bail conditions for many years, and typical conditions include staying away from the victim or from specific areas. However, the fact that such conditions end once the defendant has been sentenced often produces results that the victim finds difficult to understand. It seems odd that a defendant who claims to be innocent—and who may indeed be innocent—can be forbidden from contacting someone whom he is alleged to have assaulted, but that, once he has been convicted, he is free to return to, to speak to, and therefore to cause fear and concern to, the person whom he has been convicted of assaulting.
Restraining orders are currently restricted to convictions under sections 2 and 4 of the Protection from Harassment Act—in other words, a defendant who merely causes another to fear that violence will be used against


him or her can be ordered not to contact the victim again, but someone who actually uses violence cannot be made subject to a similar order. An example of that might be the recent case of Burstow, the stalker who was released having served a three-year sentence for causing psychological bodily harm to Tracey Morgan. He immediately began contacting her again, but the police were powerless to do anything until he had done enough to breach the Protection from Harassment Act.
Burstow's contacting his victim again was not enough to cause a breach, as there was no order specifically prohibiting him from doing so. My Bill would rectify that, and cover many other incidents of the sort that victims experience all too often. It is simply not true that victims who express alarm that, "The man who raped me now lives around the corner," are automatically calling for him to be returned to prison. What they want is for him to be prevented from having any contact with them again, so enabling them to rebuild their lives in peace.
Let me give a couple of examples of the sort of people whom I hope would be affected by the Bill. Currently, the only way a victim of domestic violence can ensure safety is through a civil injunction. Unless the woman qualifies for legal aid, that has to be obtained at her own expense, and she certainly has to endure two court appearances in respect of the same incident. A burglar who returns to the estate that he robbed or a drug dealer who returns to his favourite corner cannot be prevented from doing so. The Crime and Disorder Act 1998 addressed some of those issues, but it can be applied only through a court other than the one in which the criminal was originally convicted. In addition, it appears that that Act applies only to offences affecting a community, rather than a single individual.
Extending restraining orders to other serious offences would mean that, at the same time as a prison sentence was imposed, a burglar could be prevented from revisiting the estate on release, or a rapist could be prevented from contacting the person he has raped or returning to the area in which the rape occurred. My Bill would cover any offence punishable with imprisonment of five years or more—in other words, a serious arrestable offence. It would also cover certain other offences relating to the use or threat of violence, racial hatred and personal harassment.
Where a crime of common assault or domestic violence occurs, the victim would benefit from a court order being attached to the prison sentence. Such an order would be quicker, it would reduce the need for legal aid because it

would be dealt with by the sentencing court, and it would be processed by the Crown Prosecution Service. The order would also be of considerable help to victims of domestic violence because a civil injunction does not carry with it the powers of arrest.
The second part of the Bill relates to what I have called protection orders. The two orders are thematically linked. If a person believes himself to be a danger to others, or if a statutory agency such as a health authority can provide evidence to a court that a person is likely to be a danger to others, a protection order may be made which would mean that the person concerned was taken into protective custody. A breach of the order would not, in itself, be a criminal offence, but the police could detain the person in police custody and return him or her to a place stipulated by the health authority. The order would have to be made by a circuit judge in a county court, and he would have to give written reasons for his judgment. The police or the local authority could be asked to provide information if the request were reasonable. The case of Michael Stone, who was convicted of the brutal murder of Mrs. Russell and her daughter Megan, might have fallen into that category.
The measure would affect only a small number of people, but it would provide an opportunity to protect both the individual and the potential victim of a serious violent offence. That protection to the individual and to his potential victim is very much in line with the European convention on human rights. For that reason, I hope that the House will be able to support this Bill. It will give further assurances to the general public—and to victims in particular—that we are serious about protecting our citizens from violence, from the fear of violence and from intrusion into their lives.

Question put and agreed to.

Bill ordered to be brought in by Ms Bridget Prentice, Mr. Vernon Coaker, Ms Ann Coffey, Mr. Andrew Dismore, Mr. John Heppell, Mr. Phil Hope, Mrs. Jacqui Lait, Kali Mountford, Mr. Ian Pearson and Joan Ruddock.

RESTRAINING AND PROTECTION ORDERS

Bridget Prentice accordingly presented a Bill to empower the courts to make orders which restrain the conduct or movements of a person convicted of certain criminal offences, for the purpose of protecting the victim of the offence; to make similar provision with respect to orders which require statutory agencies to provide services to certain persons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 7 May, and to be printed [Bill 93].

Orders of the Day — Finance Bill

(Clauses 2, 28 and 99)

Considered in Committee [Progress, 27 April].

[SIR ALAN HASELHURST in the Chair]

Clause 28

RESTRICTION OF MCA TO THOSE REACHING 65 BEFORE 2000–01

Mr. David Heathcoat-Amory: I beg to move amendment No. 1, in page 14, leave out lines 21 and 22.

The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss amendment No. 2, in page 14, leave out lines 25 to 27.

Mr. Heathcoat-Amory: I ask the Committee to consider these amendments, which make changes to the Government's provisions regarding the married couples allowance. As I think the Committee knows, the Finance Bill will abolish the married couples allowance and replace it in due course with a children's tax credit.
When the Chancellor announced that change in his Budget speech, he rather typically failed to make it clear that the children's tax credit will not come into effect until April 2001. So the Government have the use of about £2 billion in public money for that year. In addition, the children's tax credit will cost the Government about £650 million less than the married couples allowance, which they are abolishing. The Government are removing an allowance that is familiar and upon which many people rely and replacing it a year later with a cheaper allowance.
Moreover, the Treasury Select Committee report describes the new arrangement as "complex". Much of the evidence that the Committee received about this section of the Bill points to problems in administering the children's tax credit, the fact that it will create a high marginal tax rate as it is withdrawn up the income scale, and that it generally represents a further complication in an already over-burdened tax system.
We shall undoubtedly debate the tax credit in greater detail at another time, but it is relevant to discuss it now because of the Government's switch. They are abolishing an allowance that has been a familiar and valued part of the tax system and upon which many people have relied and are replacing it with an untried, complex arrangement that will be less generous and will go to different people.

Mr. John Healey: Will the right hon. Gentleman comment on the observations of Mr. David Brodie, the director of the charity TaxAid, who, after the Budget, said:
The children's tax credit is a generous arrangement, reducing most taxpayers' liabilities by £416 a year or £8 a week, which is double the value of the married couple's allowance"?

Mr. Heathcoat-Amory: If the hon. Gentleman had told us a little more about what the charity sector is saying,

he could have referred to its critical remarks about the withdrawal of dividend tax credits, something that will hit charities extremely hard when the transitional arrangements end.
Although people may welcome additional money for children and families, that does not excuse this measure, whereby the Government are taking away money from childless couples and, as I shall now outline, hitting particularly hard people who are coming up to retirement age. That is the subject of the amendments.
In his Budget speech, the Chancellor asserted:
Today's pensioner couples will retain the married couples allowance."—[Official Report, 9 March 1999; Vol. 327, c. 183.]
He hoped to convey the impression that, although married couples allowance is being abolished for most taxpayers, it is being retained for pensioner couples, but that is not the case. If people become 65 after 5 April next year, they will not receive the married couples allowance. That date is entirely arbitrary. If people were born on 5 April 1935, they will receive the allowance in old age; if they were born a day later, on 6 April 1935, they will not receive the allowance. Being born a day later makes a difference of £500.
The Red Book, which fleshes out the details of the Budget, contains a section on pensioners and an entire chapter called, "Building a Fairer Society". Nowhere does it explain the unfairness and say why pensioners will not receive the married couples allowance if they reach retirement age after next April. It does not explain also why a one-day difference in birth dates can determine whether one receives a £500 tax credit. That measure is not fair or equitable; it is a good illustration of stealth taxation. The apparent extension of married couples allowance to pensioners will, in fact, apply to a smaller and smaller number of people as they die off or get divorced.

Mr. Geoffrey Clifton-Brown: Does my right hon. Friend agree that people in their late 50s and early 60s, especially those on low incomes, who were born after that magical date, are being particularly discriminated against because there is virtually no likelihood that they will be able to have children if they have not already got them, so they will not be eligible for the child tax allowance, and nor will they be eligible for the older married couples allowance?

Mr. Heathcoat-Amory: My hon. Friend makes a good point. Many of those people who are coming up to retirement will have looked forward to relying on the married couples allowance. Almost by definition, they cannot now alter their working arrangements, work overtime or get a different job to make up for the income that they will lose. That is the extent of their vulnerability, and yet, out of the blue, comes a Budget that will remove an important and valued tax allowance which they were looking forward to, when it is already too late for them to make alternative arrangements.

Mr. Geraint Davies: Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory: I will when I have completed the point.


That blow is the latest in a series of blows that the pensioner and saving communities have suffered at the hands of the Government. In the Government's first Budget, there was a £5 billion a year raid on pension funds as a result of the withdrawal of dividend tax credits. Therefore, the same people who are now coming up to retirement have already seen the value of those pension funds reduced.
Does the hon. Gentleman still wish to intervene?

Mr. Geraint Davies: My simple argument is that every change in tax interferes with people's tax planning and confounds their plans. That aspect is not limited to the change that the right hon. Gentleman was criticising, or to people over 65. Anyone, such as myself, who might have benefited from the married couples allowance now cannot plan towards that, but that is the nature of changing tax.

Mr. Heathcoat-Amory: The point that I was making was that pensioners are especially vulnerable. If the hon. Gentleman were to have his tax allowances removed suddenly, he might be able to get a different day job to make up that reduction, but that option is not open to the people who are hit by clause 28.
As I was in the middle of saying, this is not the first blow that those people have suffered. Not only is the withdrawal of dividend tax credits from their pension funds draining £5 billion a year into the Treasury, but many of those people made regular savings into personal equity plans, and all that was stopped from April 1999. PEPs have been replaced by individual savings accounts, which are more expensive, more complicated and less advantageous. Therefore, a series of hammer blows has landed on the very people who are hit by the clause.
Everywhere, the Government have hit pensions and savings, and the next generation of pensioners will now have their personal allowances reduced or abolished as well.

Mr. Christopher Leslie: If the right hon. Gentleman is so concerned about future planning, will he explain the rationale behind his Administration's halving of the value of the married couples allowance over the period when he was a Minister?

Mr. Heathcoat-Amory: It is one thing to reduce an allowance and quite another to abolish it. Moreover, it is a clearly different thing to reduce an allowance in the context of a tax-reducing strategy. We brought the level of personal and direct taxation down in successive Budgets. Against that background, it is fully justified to reduce some allowances and increase others. However, the Government are relentlessly increasing the burden of direct taxes on, and reducing the allowances of, the most vulnerable people in the tax-paying community.

The Paymaster General (Dawn Primarolo): Will the right hon. Gentleman tell the Committee the value to that same pensioner group of the cut in the married couples allowance made by the Conservative Government, and will he explain why he thinks that that was worth less?

Mr. Heathcoat-Amory: We have a proud record of reducing personal and direct allowances and, by the end

of our term of office, all sections of the tax-paying population were better off. We are now witnessing an assault, not only on the general tax-paying public, but especially on people who are less able to order their affairs to compensate for what the Government are doing. There is no better illustration of that than clause 28.

Dawn Primarolo: Will the right hon. Gentleman give way?

4 pm

Mr. Heathcoat-Amory: No. I have given the hon. Lady her chance. She may well have an opportunity to make a speech if she catches your eye, Sir Alan.
It is not only the married couples allowance that is being abolished. There is also the widows bereavement allowance. The Committee may need reminding that, attached to the married couples allowance, is the separate but linked widows bereavement allowance, which is paid to widows for up to two years after suffering that bereavement. A Government press release on Budget day made the following erroneous claim:
Widows will be more than compensated for the loss of this allowance by the proposed Bereavement Payment in the Welfare Reform and Pensions Bill.
The Chancellor has now admitted that that was incorrect. There is an opportunity for the Government to apologise to the House of Commons through the Committee rather than relying on a letter that was written to the Select Committee on the Treasury, in which it was admitted that the press release was incorrect.
The Government made quite a seriously misleading statement. It is now clear that widows in retirement will be suffering from more than the withdrawal of the married couples allowance, because they will not be in receipt of either the widows bereavement allowance or the replacement bereavement payment. I quote from the relevant section in the Select Committee's report, which states:
The Chancellor agreed to write to us, and in their note the Treasury stated that the bereavement payment 'will not generally be available to people over pension age'.
That contradicts the statement that was made on Budget day. I hope that the Minister has made a note of that. It would be at least a courtesy if she could correct the misleading and untruthful statement that was made on 9 March.

Mr. Edward Davey: Talking of correcting misleading statements, I am not sure whether the right hon. Gentleman made a slip of the tongue, a Freudian slip or a confession. He said a few minutes ago that the Conservatives had a proud record of reducing allowances. That is certainly what they did, and many people are worse off because of that.

Mr. Heathcoat-Amory: If I made that slip, I can correct it. We reduced the burden of taxation by reducing rates and preserving, and in some cases increasing, allowances. The effective burden of taxation borne by the groups that we are discussing was reduced during our period in office. I am grateful to the hon. Gentleman for giving me the opportunity to clarify that point.
The widows bereavement allowance is an important issue. It was not mentioned anywhere in either the Chancellor's statement or in the section in the Budget


report to which I have referred. Again, we have an example of stealth taxation. With this Government, we have always to peal away the obfuscation, and, in this instance, the downright untruth, to get at the reality of what is happening to taxpayers.
On the very date that I have been talking about, 6 April 2000, the value of state earnings-related pensions will be halved for spouses. That is to say that a widow, for example, will be able to inherit only 50 per cent. of the SERPS entitlement built up by her husband. That is a pre-existing decision; it was taken many years ago. However, I am grateful for an early-day motion, which has been signed by a number of Labour Members, which points out that the Government, until this year, were sending out, again, misleading information to those making inquiries about the value of the SERPS entitlement for spouses. It is yet another blow that, on the very day that a widow's SERPS entitlement is halved, the Government are removing the entitlement to the widows bereavement allowance. That will be the subject of other amendments when the Bill reaches another Committee. Those amendments will ensure that pensioner couples continue to receive married couples allowance, as I believe that they are entitled to do. Many of them rely on it, and Conservative Members believe that they should have it.

Mr. Julian Brazier: Clause 28 is the worst clause in the Bill and I am delighted to speak to this pair of Opposition amendments relating to future pensioners. I must say, Sir Alan—if you will forgive me this anecdote—that I remember clause 28 of another Bill from some years ago causing huge demonstrations and attracting a vast amount of media attention for those who claimed to be defending an alternative life style. This clause 28 has attracted little media attention. There is little public interest, and certainly no demonstration to defend the interests of many millions of married people who will lose a benefit that has existed, in one form or another, since the end of the first world war.
Nobody in the Chamber could have failed to notice the certain amount of mischievous reporting, which has been filling some of the media, on an alleged debate in my party on the question of welfare and the balance between the free market and the state. The debate on these amendments offers me a particularly good opportunity to state my position, which is that welfare should never lie principally with either the state or the free market. By far the most important element of welfare is the family—historically and even today.
I look forward to the next debate, in which we shall discuss how the clause relates to people who are rearing children. I do not want to make the same points twice—you would rightly call me to order, Sir Alan—but the statistics I shall offer then concern the stability of the relationships of married and unmarried people. They point strongly to the efficacy of marriage as an institution in terms of keeping a man and a woman together.

Kali Mountford: Will the hon. Gentleman give way?

Mr. Brazier: In a moment.
There are a range of reasons for believing in the importance of marriage. In the context of a Finance Bill, the state, as well as the people concerned, has an interest in that stability.
Before the hon. Member for Colne Valley (Kali Mountford) makes the point that was bound to be made—someone always leaps up to make it—I am obviously not suggesting that people will rush off to get divorced because of a change in legislation. However, before I reply to the point that I suspect she is about to make, we should hear her make it.

Kali Mountford: I thank the hon. Gentleman for giving way. I had not thought of making a point about divorce, so I thank him for raising the issue in the Committee. I was going to ask him what evidence the Conservative Government gathered during their period in office that family stability had been affected by tax decisions. Are not there all sorts of demands on families? People do not base decisions about family stability on tax allowances.

Mr. Brazier: I suggested that the hon. Lady might make exactly that point, and she has done so.
Unlike my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on the front row—[HON. MEMBERS: "He was the hooker."] My right hon. Friend was a sportsman, but I will not make a point about that. I do not defend the cuts that we made in the married couples allowance, but the evidence on stability falls into two halves. For the second half, the hon. Lady will have to wait for a couple of hours because I shall deal with it under the next amendment as it relates to couples with children. It is very detailed and comes from statistics provided to me by the House of Commons Library.
Overwhelming evidence shows that marriage is the critical factor in stability of relationships between men and women. The second half of the hon. Lady's question lies—

The Chairman: Order. I have allowed the hon. Gentleman to preface the introduction to his remarks, and he has done so in a fairly wide-ranging manner. I am duty bound to the Committee to nudge him back into the narrow area covered by the amendment, which deals with the age-related married couples allowance. We cannot have a general debate about the married couples allowance.

Mr. Brazier: I well understand that, Sir Alan. I was responding to the generalised question that the hon. Member for Colne Valley asked me, which was what evidence I had that the tax system influences people's behaviour. I must reply briefly to that, if I may—

The Chairman: Order. As a result of my generosity in the first place, the hon. Gentleman made remarks which attracted the attention of the hon. Member for Colne Valley (Kali Mountford). He must not go further down that track. I have now decided that he has gone far enough, so I suggest that he returns to the narrow terms of the amendment.

Mr. Brazier: In that case, the hon. Lady will have to wait for the next debate.
Is it fair that a married couple who are only four or five years from retirement, who have gone through their working lives without drawing benefits, having never been out of work, should be told that they are to lose


the married couples allowance? They may both have contributed all the way through, or the husband may have done so while the wife had a gap for child rearing—or the other way round, as is increasingly common. That benefit is worth several hundred pounds a year and the couple may have been relying on it as part of their retirement income.
At the risk of arousing your ire again, Sir Alan, may I say that, as my right hon. Friend the Member for Wells said, that comes as part of the framework of changes in provision for those approaching retirement—a framework that has challenged the contributory principle. Why should those approaching retirement not think that, having paid into the system all throughout their working lives, it is only fair that the Government should not move the goal posts, as clause 28 would do? Why should they not say, "We have paid our taxes. We are approaching retirement. Why should only those who are already retired on the date shown in the clause benefit from the allowance?"

Mr. Steve Webb: The hon. Gentleman and I share a belief in the institution of marriage. However, he makes a point about the stability of marriage in a debate on a group of amendments which deals specifically with allowances for pensioners. Is there any evidence to suggest that there is instability in pensioners' marriages?

Mr. Brazier: The hon. Gentleman allows me a second bite at the question. I congratulate him on his clever phrasing, which I think, Sir Alan, allows me to reply. The short answer is that I have seen no clear statistical evidence of that. Most of us come to this House because we believe that the signals that Members of Parliament send matter. It seems extraordinary that we should tear up a signal which, since 1918, successive Chancellors of the Exchequer — two were from the Liberal party and others were from the Labour and Conservative parties —have believed to be very important. That signal is that the House believes that marriage matters and that, in this context, people approaching retirement deserve some recognition through the tax system of the fact that they are married.

Dawn Primarolo: Will the hon. Gentleman explain to the Committee why the right hon. and learned Member for Rushcliffe (Mr. Clarke), when he was Chancellor of the Exchequer and announced a further reduction under the Conservative Government of the married couples allowance, described it as an anomaly in the system that we did not need?

Mr. Brazier: Bluntly, I do not agree with my right hon. and learned Friend.

Mr. Edward Davey: The hon. Gentleman voted for it.

Mr. Brazier: The hon. Gentleman is right to remind me that I voted for it. At the time, I was in the middle of a rebellion on another family issue, as some hon. Members may remember. The married couples allowance is not an anomaly. I believe that that was the wrong

decision, and a wrong justification for the reduction. The allowance has existed since 1918, and I am delighted that the Conservative party as a whole—Conservative Members on the Front Bench and on the Back Benches—will shortly be able to vote against this measure. I hope that the Liberal Democrats will join us in the Lobby.
This issue is not just about signals or the importance of marriage: there is a practical point. I said at the beginning of my speech that the most effective form of welfare is that provided within the family. We all know of couples—many of us have examples in our own families—one of whom looks after the other. It is more often the wife who looks after the husband, but sometimes it is the other way round.

The Chairman: Order. I am not sure that the hon. Gentleman is taking on board my signals. The debate is about the age-related married couples allowance. He is making a speech that would fit more naturally into the clause stand part debate. I ask him for the final time to keep within the terms of the amendment.

Mr. Brazier: I was about to mention nursing care for the elderly. The key point is that if the husband looks after the wife or the wife looks after the husband, the little bit of extra income that is currently provided by the married couples allowance may assist in ensuring that that unpaid, unrecognised, undervalued carer feels able to go on. Any reasonable person would accept that several hundred pounds a year might, at the margin, make the difference, and enable a wife or a husband, who, for a number of years has looked after an elderly or less fit spouse, to go on.

Mr. John Hayes: Specifically within the terms of the amendment, does my hon. Friend acknowledge that the majority of registered disabled people are over retirement age? The Government want to drive them into work as part of their reforms, but that is neither here nor there. Many of the people to whom my hon. Friend refers have severe disabilities and will be particularly hard hit by this measure.

Mr. Brazier: Yes, indeed. My hon. Friend will remember the touching testimony of the shadow Secretary of State for Social Security, our hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith). For many years, his mother nursed his elderly father, who was suffering partly as a result of the wounds he acquired during the war. She was unpaid and unrecognised by the benefit system, but she nursed him through it. Such couples will lose the married couples allowance.
It is extraordinary that, after all these years, we should remove this cover. It is particularly sad and arbitrary for the Government to say that people who have already retired are different from those who are about to retire. The aim of my right hon. Friend's excellent amendment is to ensure that married couples who retire in the future get the same benefit as people who are currently retired, the value of which the Government have recognised by leaving it in place for people who reach 65 before 2000–01.

Mr. Geraint Davies: We should consider the financial impact of what I consider to be an unfortunate wrecking amendment. The Government propose to scrap an


allowance that has already been discredited by the Opposition, who have continually reduced it and who accept that it should go. The question is, what is the best strategy for phasing it out? The Government propose to retain the allowance for those who are currently pensioners, but if the amendment were passed, it would never be phased out: all new pensioners would continue to enjoy the benefit. Given that Britain has an ageing population, the Exchequer would be spending money that could otherwise be spent on families, and on children in particular. The point of the clause is to transfer expenditure to families in need.

Mr. Nick Gibb: Did not the hon. Gentleman stand for election on the platform that his party was committed to not raising taxes? During the general election campaign, the leader of his party said that there would be no tax rises at all. Is not the abolition of the married couples allowance, particularly for pensioners, simply an increase in income tax? How does the hon. Gentleman justify that?

Mr. Davies: The hon. Gentleman refers to a myth that is being peddled continually. The commitment was for income tax not to be increased. I was not going to mention this, but we have reduced income tax rates to 23p and l0p, which is a remarkable achievement.

Mr. Gibb: How can the hon. Gentleman say that his Government have reduced income tax? The abolition of the married couples allowance will mean that an ordinary married couple will pay an extra £197 in income tax. How does the hon. Gentleman square the two statements?

Mr. Davies: The commitment was to reduce the rate of income tax, and that is what we have done—as well as reducing the rate of corporation tax, and other taxes. It would be bizarre for any Government to say that they would never increase any taxes. Apart from anything else, what would they ever do? It is unbelievable that any sensible person could interpret anything that the Prime Minister has ever said as meaning that we, as a new Government, would never raise taxes. That is a farcical idea.
I have been distracted. Let me return to the narrow arena of the amendment. We have spent about £2 billion a year on the married couples allowance, an increasing proportion of which is used by people over 65 as they grow older. The question is whether that should continue—as it would if the amendment were passed—or whether the money should be targeted on families who are in greater need, as our general strategy suggests. I hope that the Opposition will answer this question at some point today: where would they find the money to fund that increasing share of the £2 billion? Would they take it from impoverished families with children, or would they tax it? Do they entirely dismiss the Government's overall strategy of directing money towards families to enable them to work and to care for their children?
The hon. Member for Canterbury (Mr. Brazier) mentioned family values. He also referred to "child rearing", as though he was talking about chicken farming. The Government's strategy is intended to help families: that is the whole point of it. As for "signals", does the hon. Gentleman not agree that the signal that the Opposition are sending the community in the amendment

is "Do not get married until you are 65"? The amendment poses the danger of a sudden surge of people marrying at 65.

Mr. Brazier: rose—

Mr. Howard Flight: rose—

Mr. Davies: Here they come! They are surging ahead! They are surging everywhere!

Mr. Flight: Surely, according to the hon. Gentleman's logic, the tax incentive that the Government have given to 65-year-olds will lead them to contract serial marriages and start families again.

Mr. Davies: That is obviously the signal that the hon. Gentleman has received. No doubt he intends to go off and do that, but I do not think that such a move would be rational. I think that he should reconsider his personal position.

Mr. Edward Davey: I shall not try now to enter into subject matter that will be dealt with in later debates, on amendment No. 8, on clause 28 stand part, and on the principle behind the married couples allowance, except to say that the comment of the hon. Member for Canterbury (Mr. Brazier)—that one must support the married couples allowance if one is in favour of the family and marriage—simply does not stand up. The idea that the tax system must support marriage and the family is a complete fallacy. There are 101 other policies that would be more effective in supporting marriage and the family, and I shall describe some of them in our later debates. However, I felt that I should make those preliminary remarks, so that my subsequent remarks flow logically.
As my hon. Friend the Member for Northavon (Mr. Webb) said, in his intervention in the speech of the hon. Member for Canterbury, there is no evidence that the married couples allowance has increased the stability of marriage among elderly people. I have figures, which the hon. Member for Canterbury did not have with him, from "Social Trends 1999", suggesting that, over the years—as the previous Conservative Government phased out the married couples allowance—the stability of marriage among elderly groups has, if anything, increased. In 1971, the divorce rate among those who had been married for 30 years or more was 9 per cent. In 1996, the percentage had gone down to 5 per cent.
Therefore, if anything, the stability of marriage among the elderly has increased.

Mr. Hayes: Although I know that this may test the hon. Gentleman's intellectual capacity, is not the logic of his statement—given the figures that he presumably has at his disposal, showing an increasing number of marriage break-ups among people in their 20s and 30s—that reducing the allowance encourages marriage break-ups among younger and middle-aged people?

Mr. Davey: I was going to deal with exactly that point, and to say that, because of that very point, one has to interpret the figures with some care. I therefore take on board the hon. Gentleman's first point. However, the


figures do not support the second point that he was trying to make—that reduction and phasing-out of the married couples allowance has increased the divorce rate.

Mr. Gibb: Is it not the case that, although the value of the married couples allowance under the previous Government was reduced for people under 65, its value was maintained throughout that period—as it was in the current Government's first year—for people over 65? Do the figures therefore prove the case one way or the other?

Mr. Davey: I had planned to deal with the relevant point behind the hon. Gentleman's remarks—the need to ensure that we protect that group of elderly pensioners. We have to ensure that people in that group have some offsetting allowances, to ensure that they are not hit by the proposed measure. It is an important point, and the most germane argument in relation to this group of amendments.
There is a case for keeping the married couples allowance for new pensioners, to protect them from taxation increases. However, if we can protect that group within the Government's overall package, it would be satisfactory to phase out the married couples allowance for everyone, so that the tax system might be simplified. So far, although the Government have probably not gone far enough to compensate pensioners, they have included in the Finance Bill the right types of measures, on which we should hope to build in Committee.
The children's tax credit does not apply to this group of amendments—although, judging from his comments, the hon. Member for Canterbury might like them to.

Mr. Brazier: What does the hon. Gentleman mean by that?

Mr. Davey: The hon. Gentleman seemed to be suggesting that people would try to exploit the children's tax credit by having large families, and that the Government were trying to create such an incentive.

Mr. Brazier: You have the wrong Member.

Mr. Davey: I apologise; I was referring to the hon. Member for Arundel and South Downs (Mr. Flight).
I want to highlight the Bill's measures that will protect that group of pensioners. Clause 21 provides an over-indexation of personal allowances for the elderly. It does not completely compensate them; it is a partial offset, but it is the right measure.
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The Liberal Democrat alternative Budget, which was produced before the Chancellor's statement, proposed a simpler tax system that got rid of allowances such as the married couples allowance and increased the basic personal allowances. So, in this regard, the Government are taking our ideas on board, or at least sharing the same ground and acknowledging that we need higher personal allowances that protect pensioners and other low-income groups from a higher tax burden.

Mr. Geraint Davies: Is it not the case that raising allowances as prescribed in the Liberal Democrat

manifesto would cost some £15 billion? Can the hon. Gentleman say briefly where the money would come from? Would he raise income tax or what?

Mr. Davey: I shall not try your patience too much, Sir Alan, but the document that we published prior to the Budget set out all the details and costings. Those costings included the abolition of the married couples allowance.
Our position today is totally consistent with what we said before the Budget. We shall vote against the amendments and support the Government tonight because they are going in our direction and increasing personal allowances to protect vulnerable groups. They could go further, and I am sure that we shall debate that later.
For example, clause 19 could have provided even more protection for elderly people. The Government introduced a lop starting rate of income tax, but they have not applied it to savings. Is that not introducing an anomaly? They could have taken the opportunity to provide further protection for current and future pensioners who will be hit by parts of clause 28.
We call on the Government to ensure that pensioners are not only protected from the abolition of the married couples allowance, but targeted as a group that need more resources. In previous Finance Bills, the Government penalised pensioners through, for example, the abolition of dividend tax credit. I hope that the Committee will return to that point as we certainly intend to put the Government on the spot. More than 300,000 pensioners have lost an average of £75 a year as a result of that policy.
The Government could go further. In previous debates, my hon. Friend the Member for Northavon spoke about our policy to increase the basic state pension by £3 a week for those aged over 75 and by £5 a week for those aged over 80. That would target resources on those most in need, as poverty among elderly people is highly correlated with age. It would ensure that those groups were protected from the abolition of the married couples allowance, and more than compensated. They would be far better off with that package of policies.
We shall table amendments to the Welfare Reform and Pensions Bill when it is considered on Report, proposing that policy package. I believe that we already have the support of the right hon. Member for Birkenhead (Mr. Field), a former Social Security Minister. I shall be interested to see whether Conservative Members sign up to those amendments and vote with us on welfare policy. If they really are interested in protecting pensioners, they will back our policy, which is the best way of using taxpayers' money to alleviate poverty among the elderly. We look forward to them supporting us as that would be in line with their arguments this afternoon.
The Liberal Democrats reject the amendments because they would prevent an overdue reform of the tax system. They would prevent a reform that would simplify the tax system and free up resources that could be used elsewhere properly to promote the family, targeting resources on children, and giving the Chancellor the resources to tackle pensioner poverty.

Mr. Flight: I listened carefully to the Chancellor's presentation of his Budget. He did not say that the married couples allowance would be retained for current pensioners, but abolished for future pensioners. He used


the general word "pensioner". As was reported in the media at the time, he gave the distinct impression that the intention was to retain the married couples allowance as a tax measure to help support pensioners in their retirement.
I spoke at a large meeting in my constituency the week after the Budget, at which I made clear the reality of the Chancellor's proposals. Not surprisingly, there was considerable annoyance in my audience at the Chancellor's Orwellian use of language to secure misleading headlines. I call on the Government to make their intentions and proposals clear, if nothing else. The Budget speech is too important for half truths.
The Chancellor also argued that there was a trade-off. He said that, although it was a good thing to abolish the married couples allowance—because it had got so untidy when it came to deciding who qualified for it, with many contorted questions about whether people were married or divorced, and so on—the trade-off was to be the new child credit.
More Orwellian language was used when it was stated that the proposal was all about the Government's pro-family policy. However, the word "family" does not now mean mother, father and children, as it used to. It now refers to children with perhaps one parent: if there are two parents, it does not matter whether they live together.
It is axiomatic that retired people do not have families. What I said in my intervention in the contribution from the hon. Member for Croydon, Central (Mr. Davies) was mainly in jest, but I was trying to illustrate the very real point that an argument can be made for changing the married couples allowance tax benefit to the new child credit. Such a change would have a redistributive element—the less well-off would be better off and the better off less well-off—but, overall, the benefit to families would be about the same.
There is a fairness to that argument that echoes the Chancellor's favourite phrase about fair tax policies, but there is no fairness in simply removing a substantial tax benefit for elderly people that is not to be made up elsewhere. The figures show that, for people over 75, the married couples allowance is worth more than £5,000. That is quite substantial, and the value of the allowance after tax is quite significant.
I want to expand on the point that has been made already about planning. People plan for their old age. Perhaps many hon. Members have not yet reached the age when they start such planning, but I certainly have. People work out their pensions and savings in building societies so that they can plan their financial arrangements for old age. With the introduction of stakeholder arrangements, the Government are exhorting more and more people to make such provision, but it is too late for people aged 65 to make changes, to begin new careers and take out new insurance policies, and so on.
I submit that a change such as is proposed requires much longer notice than a year. People retiring in the next 10 years, say, will not be able to make up for the tax loss that this change will inflict.
The reduction in the SERPS widows benefit has already been cited. That was announced some 13 years ago, but hon. Members will be aware that hardly anyone knew about it. The Department of Social Security often gives incorrect advice, but the real problem is that people were not aware, even after 13 years, of the changes to that benefit.
A principle of the tax system is that it should not change all the time. The Government made no mention in their election manifesto that they were going to abolish the married couples allowance for retired people. That abolition is part of a considerable and growing attack on the great rump of pensioners in the middle of society. When I listened to the hon. Member for Croydon, Central, I could not help feeling that he was saying that ageism is now politically correct among Labour Members. He seemed to feel that there was something virtuous in deriving pleasure from taxing older people more. Their pension funds are being taxed. They are being stopped from having tax credit on dividends if they pay no tax. The Government are removing tax benefits on insurance policies. Is all that some sadistic attack on elderly people? It seems to be thought that it is politically proper.
My main criticism is that the provision is devious and misleading. It was not made clear, and pensioners are not being compensated for it. The top-up to pensions guarantee applies only to people who have minimal savings or none. The measures will simply make the great mass of older people less well off in their retirement.
Pensioners are not stupid. In New Zealand, Ministers are frightened even to address public meetings because pensioners have been physically assaulting them. The Government seem to think that pensioners are soft prey and that the media are not interested. However, in my experience, the senior part of British society has rumbled the sum total of the fiscal attacks that the Government are mounting. The matters covered by the two amendments are, in the Chancellor's language, unfair and unjust, and the way in which they were announced was downright misleading.

Kali Mountford: My hon. Friend the Member for Croydon, Central (Mr. Davies) was quite right to say that the amendment is a wrecking amendment. If the official Opposition were serious about amending the clause, they would have suggested some reasonable future date. If they disagree with our date, why not suggest another proper date two or three years hence? The Tories are simply opposed to the resolution. They simply do not like the abolition of the married couples allowance. Rather than be straightforward, they have produced a wrecking amendment without talking about the age group that would be affected by it.

Mr. John Bercow: Will the hon. Lady give way?

Kali Mountford: No, I shall make my point.
A couple who had had no married couples allowance would suddenly receive it on their retirement date. That makes no logical sense. In his considered speech, the hon. Member for Kingston and Surbiton (Mr. Davey) rightly noted that, if we are to find resources to fund measures that I think are the right ones, money must be found sensibly and logically in a way that fits with the Government's overall strategy. The age group is critical in that sense.
If we are to support children, we must be consistent. Opposition Members really want to talk about families, but they must consider the effects of their nonsensical amendment. It makes no sense to encourage marriage in retirement, but not the rest of the time. Tory Members


will surely vote against the clause at the stand part stage. So why spend the Committee's time on discussing this amendment? I find it all very confusing.

Mr. Hayes: rose—

Mr. Brazier: rose—

Mr. Alan Johnson: Give way to the good-looking one.

Kali Mountford: My hon. Friend must not try to guide me. The hon. Member for South Holland and The Deepings (Mr. Hayes) asked first.

Mr. Hayes: The hon. Lady is very kind and I am extremely flattered.
I do not support the abolition of the married couples allowance for anyone, but does the hon. Lady acknowledge that the nub of the amendment is that younger married people will at least be able to make alternative provision in their many years together? Elderly married people simply do not have that opportunity. Someone of 61 or 62 who is looking forward to retirement simply does not have enough years left to make the kind of alternative private provision that will make up for what the Government are taking away. That is the salient point.

Kali Mountford: The logic of what the hon. Gentleman says is the same as that behind what I have been saying. If he believes that people need an adjustment time in which to make their financial arrangements, why does he support the amendment? It would not achieve that end; it would simply wipe out our attempts to get rid of the married couples allowance. I do not believe in a married couples allowance.

Mr. Hayes: I do.

Kali Mountford: People get married—and divorced—for all sorts of reasons, but not for tax incentives. That argument is irrelevant.

Mr. Bercow: Will the hon. Lady give way?

Kali Mountford: I think that the hon. Member for Canterbury (Mr. Brazier) asked me first, but I wanted to complete my point first.

Mr. Brazier: indicated dissent.

Kali Mountford: In that case, I give way to the hon. Member for Buckingham (Mr. Bercow).

Mr. Bercow: Will the hon. Lady tell the Committee when and where she informed the voters in her constituency that she opposed the married couples allowance, and would take every opportunity to try to get rid of it?

Kali Mountford: The hon. Gentleman knows that the proposal was made clear in the Chancellor's fine speech.
We also had a green Budget, which Conservative Governments never even tried to achieve. Under Conservative Administrations, people were never given a six-month opportunity to consider the direction that the Government should take. That argument is nonsense. [Interruption.] I cannot believe that the hon. Member for Buckingham did not read the green Budget.
I have always made it clear that we should support children, but the amendment goes down the wrong line. It would affect pensioners. It was right for the Government not to remove allowances from people who have already had the allowance and made their retirement arrangements on that basis. To remove their allowances would have been harsh and wrong, this year, when people have not had a chance to consider their arrangements.
If Opposition Members were serious about what they say that they are trying to achieve, they would have specified a date in the future—but their amendment is nonsense, and I cannot possibly agree with it.
A few other spurious measures have been discussed in the debate. The one that horrified me most was the idea of a 14-year timetable for the changes in the state earnings-related pension scheme. Why did not the Conservative Government make proper arrangements when they made the changes in 1986? It is a disgrace that they did not do so, and people could not make proper arrangements for their retirement.
It is a bit rich for Opposition Members to complain to the Committee today about SERPS, and to say that people need time to make proper, considered arrangements for their retirement. People were never given any information in the first place, and now the Labour Government are having to pick up the pieces and put things right.
The issue was debated at length in the Standing Committee on the Welfare Reform and Pensions Bill, and the arguments remain the same. The Opposition Members on the Committee at least had the decency to apologise for their Government's mistake in not administering the change in SERPS properly.

Mr. Brazier: The hon. Lady and I served together on that Committee. Will she follow her logic through and think for a moment? She is berating us for publicising something insufficiently 14 years ago, yet the interval until the change comes through is less than the interval associated with the clause. Even if the changes were published to the heavens, it is far too late for people to make provision.

Kali Mountford: The hon. Gentleman's comments might make sense if his party had ever done anything about the change in the first place. In some cases, we now have only a matter of months in which to deal with the change that people are facing. We are having to go back and think about ways of compensating people who made decisions based on the SERPS arrangement in 1986, and were not made aware of the change. Given that they left us with such a fiasco, it is a bit rich for the Tories to start arguing about proper time being allowed for changes in people's tax arrangements so that they can make proper provision for the future.
Surely, as we have made the decision, it is better to be clear about it. We are being clear about it today, and people can make their decisions for the future.


The hon. Member for Kingston and Surbiton made some valid points about how to deal with compensation for people's changed arrangements and ensuring that they can make proper arrangements for the future. We can debate at length later in the Bill's passage how to make such provisions but this amendment would not achieve any of them. Conservative Members are being disingenuous in their remarks.

Mr. Clifton-Brown: Sir Alan, I assume that we will not get a clause stand part debate and that you will therefore allow us to range a little wider than normal on the amendment.

The Chairman: I hope that I am always generous in allowing Members to speak to amendments, but I cannot be over-generous. We must not go outside the rules of order. This is about age-related married couples allowance. I hope that the hon. Gentleman will not provoke me too much. I cannot say whether there will be a later debate.

Mr. Clifton-Brown: Thank you for that advice, Sir Alan.
Clause 28 abolishes the non-age-related married couples allowance from April 2000. Unfortunately, the Chancellor has seen fit to compensate some people by a child tax allowance to be introduced one year later. People who would have been eligible for married couples allowance, whether elderly pensioners or not, will have to suffer for a whole year without any form of compensation. That enables the Chancellor to retain about £1 billion that he would otherwise have had to pay out in allowances.
In his Budget speech, the Chancellor deliberately duped the public when he set out his reasons for abolishing married couples allowance. He claimed:
It is in fact a tax credit paid at the same flat rate to married couples, single parents and unmarried parents living together."— [Official Report, 9 March 1999; Vol. 327, c. 182.]
We know that that is not true because it is the additional personal allowance that is available to unmarried and single people, and that is being abolished as well.
As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, not only is the additional personal allowance being abolished, but the reliefs that go with it. Widows bereavement allowance and relief for maintenance payments, which are both available to elderly pensioners and others, are being abolished. It is an especially mean abolition because widows should particularly be helped a little by the tax system.
The elderly married couples allowance will still be available for people aged over 65 until 5 April 2000, but there is an anomaly in that provision. The Government's Welfare Reform and Pensions Bill, and all their other social security legislation, provides that women can retire at 60. If they wish to retain the married couples allowance for retired people why should not the allowance be retained at least for women aged over 60? Will the

Paymaster General consider amending the Finance Bill so that women aged over 60 can claim the additional allowance? I am pleased to see her nodding assent.

Dawn Primarolo: indicated dissent.

Mr. Clifton-Brown: If the Minister is not nodding assent, she is going against the tenor of all the social security legislation.

Dawn Primarolo: The hon. Gentleman should check the qualification criteria for the married couples allowance. He will find that the statement that he has just made to the Committee is incorrect. I strongly advise him not to pursue that line of argument because he has made an error about who qualifies for it.

Mr. Clifton-Brown: I am grateful for that clarification, but I have here the Bill, as published, and refer the Paymaster General to clause 28(2), which states:
Subsection (1) (reduction where neither spouse is aged 65 or over)—shall cease to have effect.
Subsection (3) of the clause continues:
In subsection (2) (reduction where either spouse is aged 65 or over)—
Paragraph (a) in that subsection states:
for 'is at any time within that year of the age of 65 or upwards' there shall be substituted 'was born before 6th April 1935'.
According to my calculations, that applies only to people aged over 65, but I am willing to have the matter clarified.

The Chairman: Order. I hope that the hon. Gentleman will focus on the two lines in between that he did not quote; they are the ones that are relevant to the amendment.

Mr. Clifton-Brown: I hesitate to disagree with you, Sir Alan, but, as I understand it, the amendment applies to lines 21 and 22—I am reading from the amendment. The lines that I quoted are lines 21 and 22 of clause 28(3)(a), which state:
for 'is at any time within that year of the age of 65 or upwards' there shall be substituted 'was born before 6th April 1935'.

The Chairman: I do not want to enter into a dispute with the hon. Gentleman, but as I heard it, he read out clause 28(2) and then went on to refer to subsection (4). I do not dispute that what he has just read is the text of subsection (3)—that is the subsection that we are discussing.

Mr. Clifton-Brown: Thank you, Sir Alan. I do not want to dwell on the matter and I thank you for your advice. It seems to me that the wording of the Bill is clear, but, if I am wrong, no doubt the Paymaster General will correct me when she winds up the debate.

Kali Mountford: Is the hon. Gentleman now advocating same-sex marriage? I understood that it took two people—a man and a woman. Given that fact, what he has said seems nonsensical. Is he not simply saying that we will move the whole date forward by five years for everyone?

Mr. Clifton-Brown: As the entire social security system—and every other similar system in this country—


is predicated on the basis that women can retire at the age of 60 and men can retire at the age of 65, if one wants to deal with retired people by giving them a special, additional married persons allowance, it would make eminently good sense to allow women who retire at 60 to be able to claim that allowance. Obviously, the hon. Lady and I have different opinions on that matter and we shall not agree.

Mr. Bercow: I am grateful to my hon. Friend for trying to negotiate the details of the issue with Labour Members, but does not the absence of any logical basis in the Government's treatment of the issue prove what we know? The issue is not about consistency with other Government policies, or about ethics; it is simply a grubby bid to save a little bit of money for the Exchequer. That is the rationale. Why does not the Paymaster General give up the unequal struggle and admit it?

Mr. Clifton-Brown: My hon. Friend is too generous to the Government. The measure is not merely a grubby deal to save some money; at the same time, it claims to benefit pensioners—something that could be done much more effectively.
There is no doubt that elderly people approaching retirement have been severely disadvantaged by the measure; they will have no time whatever to build up their finances to compensate for the loss of the allowance. That is so typical of the Labour Government; they tend to hit people at the bottom of the income scale. We have seen that time and again. It is grossly unfair because those people—of all members of society—do not have the time to work overtime to make up their pensions to provide for themselves when they eventually reach retirement age. It now seems that women will be encouraged to work an additional five years—from the age of 60 to 65—because they will be denied the allowance and that, too, is grossly unfair.
Others among my colleagues have said that the measure is anti-family. Indeed it is. The married couples allowance was introduced in the first place to compensate for the fact that married couples could not claim the additional single persons allowance. Under these provisions, we are saying, in effect, that it is fine for people to live together because they will be able to claim the additional single persons allowance, but a married couple—who are not both earning—will not be entitled to claim those two personal allowances.

Mr. Geraint Davies: Does the hon. Gentleman accept that, if the Committee accepted the amendment, it would be unfair to two friends or colleagues, one of whom was married and the other not, approaching the age of 65, because the unmarried person would point to the married one and say, "My friend has the allowance and I haven't—what have I done wrong?"? Would that not be grossly unfair?

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Mr. Clifton-Brown: The hon. Gentleman has conclusively proved that Labour Members have not understood the reason for giving married couples an allowance, which is precisely to benefit people who are

married. We all want people being married to be the normal state, because they cost the state less, live more happily and derive all sorts of other benefits from being married. However, it is quite clear that the Government have absolutely no regard for that.

Mr. Davies: Is not the history of the allowance that it was designed to help married people with the costs of marriage and of children? It would be absurd to reward someone who is 65 simply because that person is married or because he or she opportunistically gets married aged 65 so as to get the allowance.

Mr. Clifton-Brown: With that second intervention, the hon. Gentleman gets himself into even deeper water. The married couples allowance is not given only to those who have children. There are thousands of married couples in this country who, for many different reasons, choose not to have or do not have children. Why should they not be given a little help by the tax system?

Mr. Bercow: I am sorry to trouble my hon. Friend again, but I cannot resist the temptation to point out yet another inconsistency between the views of Labour Members. Does he not think it extraordinary that, on the one hand, the hon. Member for Colne Valley (Kali Mountford) says that it is absurd to suppose that people get married to attract the allowance, whereas on the other hand, and only a matter of metres away from her, the hon. Member for Croydon, Central (Mr. Davies) pillories older people, impugns their motives and implies that, at an advanced age, they would rush to the altar simply to get the allowance? Government Members should get the line right.

Mr. Clifton-Brown: My hon. Friend is exactly right—no one would rush to the altar to get the married couples allowance. Successive Governments of both colours have decided that it is right to encourage the state of marriage and that there should be an additional allowance to compensate for that.

Mr. Healey: Will the hon. Gentleman give way?

Dawn Primarolo: Will the hon. Gentleman give way?

Mr. Clifton-Brown: I give way.

The Chairman: Order. When more than one hon. Member has risen, the hon. Member for Cotswold (Mr. Clifton-Brown) should state to whom he is giving way.

Mr. Clifton-Brown: I give way to the hon. Member for Wentworth (Mr. Healey).

Mr. Healey: Is not the hon. Gentleman overlooking the fact that other parts of the tax system benefit married couples? MIRAS—mortgage interest relief at source—can be claimed by both partners if they are married, but not if they are unmarried—[Interruption.] Transfers between married couples are exempt from capital gains tax, whereas transfers between unmarried couples are not.

Mr. Clifton-Brown: I am delighted by that intervention. It is the Labour Government who are


abolishing MIRAS, which is another allowance that is transferable between husband and wife. I am all in favour of allowances that are transferable between husband and wife and I strongly supported independent taxation. I urge the hon. Gentleman to make vigorous representations to Treasury Ministers that capital gains tax allowances should remain transferable between husband and wife, because it seems to me that that might well be next on their list for abolition.
The measure is a mean one, and the Government are mean to take a whole year before implementing the replacement allowance in respect of children. It is anti-family, anti-women and ageist. I urge the Government to consider allowing women to claim the allowance when they are 60 and not make them wait until they are 65. Why should women have to work all that extra time to make up their pension so that it provides them with a reasonable living in their retirement?

Mr. Barry Gardiner: In so far as the institution of marriage is under threat, few people outside this Chamber and with no political axe to grind would claim that that is due to the Government's decision to abolish the married couples allowance.
Clause 28 deals specifically with couples over the ages of 65 and 75. The hon. Member for Arundel and South Downs (Mr. Flight) said that the allowance could be worth £5,000 a year for couples over the age of 75. I am more concerned about those pensioners over the ages of 65 and 75 who come to my surgeries to thank the Government for providing the minimum pension guarantee, which guarantees approximately £4,000 a year.

Mr. Gibb: I do not know what the hon. Gentleman finds in his surgeries, but 40 per cent. of the population in my constituency are retired and people come to my surgeries and ask, "What is this minimum income guarantee? I thought it applied to all pensioners, but I now find that it applies only to those on income support." Is that not a betrayal on the part of the Government? Pensioners are led to believe one thing, but the reality is quite different.

Mr. Gardiner: This Government have introduced the minimum income guarantee for pensioners. In 1983, the previous Conservative Government abolished the link between pensions and earnings, but this Government have restored at least for the minimum guarantee.
My point—which is germane to the discussion of these amendments—is that Opposition Members here are not exercised by a guaranteed income of £5,000. That is a tax relief for those pensioners whose income is so large that they can take advantage of that £5,000 allowance. The question is clear: where do those Members' priorities lie? The priorities of this Budget, as expressed in this clause, are quite clear: we seek to benefit pensioners not through this measure but through other measures set out in the Budget.

Mr. Clifton-Brown: Will the hon. Gentleman clarify his remarks? I am sure he will agree that the odd £100 or £200 is worth considerably more to someone on a very low rate of tax than the odd £1,000 or £2,000 is worth to someone who claims the older married couples allowance at the full rate of tax. I cannot square the hon.

Gentleman's remarks that the Opposition are interested only in those couples on high incomes. In fact, we are much more interested in the meanness of this change as it affects those on very low incomes.

Mr. Gardiner: I am sorry that the hon. Gentleman did not understand me; I shall try to explain my point more fully. It is very simple. We are talking about tax allowances for pensioners whose savings are so substantial that they have steady incomes. They can take advantage of the tax allowances on the income that they generate up to £5,000. But, by abolishing the married couples allowance, the Government have introduced a £1 billion package for poorer pensioners.
The hon. Member for Cotswold (Mr. Clifton-Brown) spent considerable time talking about widows.

Mr. Clifton-Brown: The hon. Gentleman misheard me. I was talking about married women who have reached the age of 60, rather than 65, and are officially able to retire and claim the state pension, but who, under these provisions, would be unable to claim the older person's married couples allowance. That seems wrong.

Mr. Gardiner: The hon. Gentleman did talk about that, but he also talked about widows. When he was referring to whether women between 60 and 65 can claim the married couples allowance, Labour Members tried to make the point that women cannot claim that allowance because it is men who claim. If the hon. Gentleman had the courtesy to listen to my response to his intervention, he might be enlightened as to that fact, but clearly he is oblivious because he is engaged in conversation on the Back Benches, so he is unable to take advantage of that information.
The hon. Gentleman also said that nobody is about to rush to the altar to get the married couples allowance, and many of my hon. Friends and I entirely agree with him. However, in the very same breath, he said that the Government should give the married couples allowance to encourage marriage. If he accepts that no one gets married on account of the allowance, how can it be deemed to be responsible for more marriages taking place than would otherwise occur, or for maintaining marriages that would otherwise break up? The hon. Gentleman supplied no evidence that the allowance causes or maintains marriages, because there is none whatsoever.
The hon. Member for Arundel and South Downs spoke of the family, and his commitment to that institution is well known in the Committee and elsewhere. What sort of family is he committed to? I grew up in a single parent family because my father died when I was eight. I was later part of a family of siblings because my mother died shortly thereafter. Is the hon. Gentleman saying that families should receive state benefits only if they happen to have the good fortune of having two parents who are still alive to maintain the unit?

Mr. Brazier: If the hon. Gentleman had sat through the weeks of debate in Committee considering the Welfare Reform and Pensions Bill with the hon. Member for Colne Valley (Kali Mountford) and myself, he would have heard what many of us have to say about the position of widows.

Mr. Gardiner: With the greatest respect, that does not answer my question. The tenor of the hon. Gentleman's


speech was to ask, "Why does marriage matter?" Presumably, we share a consensus that marriage does matter, and the institution of the family matters, because it is the vehicle for raising children. We believe that it is good for two parents to raise children, but we should not penalise families simply because they do not have two parents to raise children. That would be absolutely abhorrent. If we accept that marriage is so important because it is the vehicle for raising children, it is absolutely ridiculous to think that we would take away the allowance on the basis of a partner being widowed.
I am grateful, Sir Alan, for the latitude that you have given me to respond to the points that have been made in the debate.

Mr. Brazier: On a point of order, Sir Alan. The hon. Gentleman has alluded to me on a matter relating to the next debate. Can I, through you, say to the hon. Gentleman that I shall respond to his point in the next debate?

The Chairman: The hon. Gentleman knows that that is not a point of order, but I am sure that the hon. Member for Brent, North (Mr. Gardiner) heard what he said.

Mr. Gardiner: The Government seek to ensure, through the changes made in the Budget, that adequate resources go to the poorest pensioners. That policy includes abolishing the married couples allowance for future pensioners, while maintaining it for those who have reached 65 or 75 by the dates specified in the Bill. If that means that Government money is being targeted and better used through the package of £1 billion for pensioners—and particularly, when we consider the married couples allowance, for the children's tax credit—I, for one, wholeheartedly welcome the measures.

Dawn Primarolo: Sir Alan, you told the Committee that you would prefer the wider debate on the changes to the married couples allowance and the creation of the children's tax credit to be dealt with in the debate on the next amendment, so I shall respond then to some of the issues that have been raised in this debate.
My hon. Friend the Member for Brent, North (Mr. Gardiner) made an excellent contribution about the importance of supporting families with children and of understanding that, when so many millions of children live in poverty in this country, that must be the Government's priority. We can, if hon. Members wish, return to that subject in more detail in the next debate.
I look forward to hearing, later in the year, the right hon. Member for Hitchin and Harpenden (Mr. Lilley) apologising at a dinner somewhere for his party's opposition to the abolition of the married couples allowance and the creation of the children's tax credit. The remarks made by the Leader of the Opposition in the Daily Mail on 29 January 1998 sum up precisely the Government's intentions, which were supported by the remarks of the hon. Member for Kingston and Surbiton (Mr. Davey). The Leader of the Opposition said
Previous conservative governments made a mistake in phasing out the married couple's allowance. We wanted to stop well off couples without children getting a tax allowance they did not need. But in doing so we hit families raising children on tight budgets. It is those fami8lies that need our help most.

That is precisely what we propose in the Bill.
The Leader of the Opposition, in his response to the Budget, generously went on to support the Government's proposal to introduce the children's tax credit.
The right hon. Member for Wells (Mr. Heathcoat-Amory), who has apologised to me for the fact that he is unable to be present for my response—he probably mentioned that fact to you as well, Sir Alan—referred to the previous Government's commitment. He made a mistake when he said that they were proud of their record of cutting personal allowances. When pressed by the hon. Member for Kingston and Surbiton, he did not get his answer right, but we look forward to hearing a correction. However, he failed to explain why, in his Budget speech in 1992, the then Chancellor, Norman Lamont—now Lord Lamont—described the married man's allowance, the predecessor of this allowance, as "the male chauvinist allowance", and why the right hon. and learned Member for Rushcliffe (Mr. Clarke) described it as an anomaly in the tax system. That was the previous Government's justification for reducing married couples allowance substantially—leaving us a chaotic system surrounding it—while they presided over a massive growth in child poverty.
The right hon. Member for Wells and several Conservative Members sought to confuse the debate—some of them obviously do not understand the current qualifications for claiming married couples allowance—by making it sound as though the Government are attacking pensioners and have broken their promises. If the right hon. Gentleman takes an unclouded look at the Bill, he will see that clause 28 protects pensioners who are currently receiving the married couples allowance. It is quite right that we should protect those senior members of our community—senior citizens who are already in receipt of the married couples allowance—by maintaining their position.

Mr. Brazier: Will the Paymaster General explain the difference between those people and people who are only a year or two from retirement? What possible changes does she think that people coming up to retirement can make to their retirement provision at that late stage?

Dawn Primarolo: First, I remind the hon. Gentleman that the overall Budget package provided £ 1 billion to pensioners through the minimum income guarantee, the £100 heating allowance and by ensuring that we keep the married couples allowance for those who are already retired. Moreover, as the hon. Member for Kingston and Surbiton said—I hope that I am not embarrassing him by drawing too much on his speech—an earlier clause of the Bill provides protection in terms of indexation and allowances.
I know that the hon. Member for Canterbury (Mr. Brazier) feels strongly about the issues surrounding marriage, which we shall discuss when we debate amendment No. 8, but it is cruel for Conservative Members to frighten those who are already retired by making it sound as though something is being taken from them when it is not.
I believe that, when the hon. Gentleman reads the record, he will realise that it is bizarre for the Conservative party to table an amendment that accepts abolition of the married couples allowance for under-65s


but provides that the couple may claim it when they reach the age of 65. The hon. Gentleman spoke about signals sent from the Committee. If the amendment were passed, the signals that it would send would create misunderstandings on an unimaginable scale.
Despite the hon. Gentleman's very strong views on marriage—which I respect, although I disagree with them—when the Conservative party was in government, he voted year on year for a policy that reduced the importance of the married couples allowance and the contribution that it made.
I remind the Committee that the married couples allowance has its origins in 1918, when men received an allowance because their wives did not work, in recognition of the extra costs in such cases. Seventy per cent. of married women now work. As my right hon. Friend the Chancellor has pointed out, since then, a chaotic system has developed, in which a two-earner family with children is better off than a one-earner family with children. That cannot be right, even on the basis of what the hon. Member for Canterbury believes.

Mr. Flight: Will the hon. Lady give way?

Dawn Primarolo: I am happy to give way to the hon. Gentleman, because I want to deal with his point about whether men over 65 will now marry younger women in order to claim both allowances. I do not know what his life is like, but I have not come across any constituents who have those bizarre determinations.

Mr. Flight: The Paymaster General said that we had the bizarre position—of which she implied that she disapproved—where a two-earner couple enjoyed a much better tax position than did a couple with a single earner. If that is the case, why on earth have the Government framed the new child tax credits in such a way as to be extremely harsh on the single-earner couple and generous to the double-earner couple, who can still qualify for those credits although their combined income may be nearly twice that of a single earner couple?

Dawn Primarolo: When we debate those clauses, I shall be happy to explain to the hon. Gentleman why his proposition is incorrect. However, if he studies the Bill—especially clause 28—he will find that, in the extremely unlikely event that a man over 65, entitled to claim the married couples allowance, is married to a younger woman with children, who is therefore entitled to receive the children's tax credit, the Bill requires them to choose which one of the allowances they receive.
One point that came up repeatedly needs answering now. Conservative Members argued that there was a entitlement gap—that we took away the married couples allowance and that no one benefited as a result. I remind them again that, from October, the working families tax credit payments will be increased to compensate particularly the low-paid, especially families that are under pressure because their budgets are so low; that the child premium in income support has been increased this year, also specifically targeted on helping those families in most difficulty, with low budgets; and that the child benefit increases—those announced for this April and the additional one for next April—will help families with children, especially families under pressure.
Clause 28 abolishes married couples allowance for couples under 65 but preserves it for couples where the husband or wife has reached the age of 65 before the year 2000-01. That is quite clear in the Bill, and it is just. The hon. Member for Arundel and South Downs (Mr. Flight) misquoted the Chancellor. The Opposition are trying to build up a bandwagon, saying that the Government, or the Chancellor, said things that they did not say. If the hon. Gentleman looks at the record, he will see that the Chancellor rightly said that today's pensioner couples would keep their married couples allowance. That is very clear and I cannot understand why the hon. Gentleman is having difficulty in understanding that sentence or which word is giving him particular problems.
5.30 pm
Abolishing the under-65s allowance for married couples means that we must have a new way of defining the basic married couples allowance so that we can use it for those who are over 65. Clause 28 provides for that minimum level and guarantees that there will be no effect on anyone's tax liability who is now in receipt of the allowance.
It would be a great error if the Opposition insisted on putting into our legislation an amendment that rewarded marriage from the age of 65 onwards but did not address the real stresses and strains in families with children and how families are forced apart because of the poverty that they experience.
When the hon. Member for Buckingham (Mr. Bercow) reads the record of our proceedings, he will realise that the confusion that he was so agitated about, believing that it existed on the Labour Benches, arose from Conservative Members. It was the hon. Member for Arundel and South Downs who suggested that men over 65 would make new arrangements in their life so as to have two allowances. Other Conservative Members suggested that our proposal is a tax on pensioners, when it is not.
I look forward to the next amendments and the next debate, when we can discuss—

Mr. Clifton-Brown: Will the Minister answer my question?

Dawn Primarolo: —in detail the children's tax credit and why the married couples allowance should be abolished. I urge the Committee to reject the amendments.

Mr. Clifton-Brown: Will the Minister give way?

Dawn Primarolo: The point that the hon. Gentleman wishes to raise is one for the next debate. I shall be happy to deal with it then.

Mr. Gibb: The debate has highlighted one of the worst stealth tax increases in the Finance Bill. The abolition of the married couples allowance will cost about 10 million married couples an extra £197 a year in income tax. When that is combined with the reduction in its value to 10 per cent. in the Government's previous Budget, the cost will be an extra £285 a year in income tax. That is from a Government who covenanted solemnly with the British people that they had no plans to raise taxes, particularly income tax. The measure that we are discussing is a straightforward hike that will affect 10 million couples.


Increased income tax bills are being introduced by stealth. This hike will raise £1.6 billion next year and £2 billion the year after that.
The sleight of hand is worse. In his Budget speech, the Chancellor of the Exchequer implied that pensioners would be protected from these measures. [Interruption.] I will quote the right hon. Gentleman. He said:
Today's pensioner couples will retain the married couple's allowance."—[Official Report, 9 March 1999; Vol. 327, c. 183.]
The hon. Lady the Paymaster General quoted "would" and skipped over the word "Today's", implying that the measure would apply to all pensioners. The key word is today, as the hon. Lady said. Tomorrow's pensioners will not retain the married couples allowance despite having made their financial arrangements on the basis that the allowance would remain. Throughout all the reductions in the value of the married couples allowance under the Conservative Government and under the present Government until now, its value had always been retained for pensioners. That is no longer the position. Its value has not been retained for new pensioners. [Interruption.]
Labour Members should read what Age Concern has said. It states:
We are already receiving complaints"—

Dawn Primarolo: Will the hon. Gentleman give way?

Mr. Gibb: I shall finish this point first. Age Concern states:
We are already receiving complaints from people who will reach 65 just after that date.
That is 5 April 2000. Age Concern continues:
From April 2000 there will be the anomalous situation whereby people will miss out on an allowance currently worth some £500, simply because their birthday is just after the specified date.

Dawn Primarolo: The hon. Gentleman does himself a disservice when he seeks constantly to mislead the House of Commons and peddles his misrepresentations. My right hon. Friend the Chancellor spoke of "Today's" pensioners, people who are pensioners now, and that is our position. If the hon. Gentleman is so concerned, perhaps he could—

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): Order. The hon. Lady must not accuse other hon. Members of misleading the House of Commons. She must choose her words very carefully.

Dawn Primarolo: I am happy to withdraw my statement about misleading the House of Commons. I am sure that the hon. Gentleman was doing it unintentionally. He just manages to do it in every debate, using the same words. He should now acknowledge that my right hon. Friend the Chancellor said "Today's" pensioners.

Mr. Gibb: That is not what the hon. Lady said.

Dawn Primarolo: The record will show that that is what I said. That means what it says and there has been no betrayal, as the hon. Gentleman has suggested.

Mr. Gibb: All that is rich from a party in government that is introducing stealth tax after stealth tax. The

impression is given—[Interruption.] The hon. Lady should read her correspondence. Instead of getting her civil servants to write and sign her letters, she should read some of it, including the correspondence that she receives. She should read what Age Concern is saying.

Dawn Primarolo: The hon. Gentleman knows full well that I sign my correspondence, and he should withdraw that remark. I sign my ministerial correspondence that goes out in answer to points raised by hon. Members. The hon. Gentleman should withdraw his remark.

Mr. Gibb: I have letters in my file from the hon. Lady which she has not signed. Many Members received letters from her when she was the Financial Secretary which she had not signed. If I am wrong, I shall withdraw my remarks. [Interruption.] I withdraw. I accept her comments but I know very well that there are letters that Members have received, and constituents, that have not been signed by the hon. Lady.
After April next year, married people turning 65 will have to pay an extra £500 a year in income tax. There will be no compensatory children's tax credit for the vast majority. In addition, 300,000 pensioners will lose £75 in dividend tax refunds. Almost 1 million pensioners will find themselves paying higher income tax on their savings income than their marginal rate of income tax. All that the Paymaster General can say in return is that there is a £100 winter fuel allowance. The Government take £500 with one hand and give £100 with the other. The message is clear: do not grow old under this new Labour Government.
My hon. Friend the Member for Cotswold (Mr. Clifton-Brown) was right when he said that a married couple approaching retirement will suffer doubly. First, they will have little chance of qualifying for children's tax credit, although last weekend I found that I had a retired constituent over 65 who had a young child from a second marriage. Secondly, the married couple will have no entitlement to the higher rate of the married couples allowance to which they thought they would be entitled.
Other hon. Members have made some valuable points. They include my hon. Friend the Member for Arundel and South Downs (Mr. Flight), who said that people make careful plans for their retirement. He is right. The Government should not give just one year's notice for the reduction in value of the allowance. It is right also that the elderly population have—

Mr. Gardiner: Will the hon. Gentleman give way?

Mr. Gibb: No, I will not give way. There is no time to do so.
My hon. Friend the Member for Arundel and South Downs was also right to say that the elderly population has rumbled the Government. It has done so on the minimum income guarantee and on the dividend tax credit. It is rumbling the Government on the savings tax and it will rumble them on the abolition of the married couples allowance for pensioners.
The Government's decision to abolish the married couples allowance has gone down badly with the public. It is yet another Labour stealth tax, and it is being seen as such. Their decision has also gone down especially


badly with those approaching retirement. The Chancellor has no doubt received, as the Paymaster General is also receiving, no doubt, many letters of complaint. I shall quote just one from Mr. J. R. Brett of Bromley, who writes:
As I shall be 65 on 9th May next year this will mean that for the rest of my life, on today's figures, I shall, in retirement, pay £512.50 more in tax than other pensioners of equal age albeit five weeks older. This is not social justice … It is one thing to juggle with Allowances for those in work, but quite another to penalise pensioners who are unable to make any provision for the loss of such a large part of their income in retirement.
The clause creates social injustice and I urge the Committee to mitigate that injustice by voting for the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 127, Noes 306.

Division No. 153]
[5.39 pm


AYES


Ainsworth, Peter (E Surrey)
Heald, Oliver


Amess, David
Heathcoat-Amory, Rt Hon David


Ancram, Rt Hon Michael
Hogg, Rt Hon Douglas


Arbuthnot, Rt Hon James
Horam, John


Atkinson, Peter (Hexham)
Howard, Rt Hon Michael


Bercow, John
Howarth, Gerald (Aldershot)


Beresford, Sir Paul
Jack, Rt Hon Michael


Boswell, Tim
Jackson, Robert (Wantage)


Bottomley, Rt Hon Mrs Virginia
Jenkin, Bernard


Brady, Graham
Johnson Smith,


Brazier, Julian
Rt Hon Sir Geoffrey


Brooke, Rt Hon Peter
Key, Robert


Browning, Mrs Angela
King, Rt Hon Tom (Bridgwater)


Bruce, Ian (S Dorset)
Kirkbride, Miss Julie


Burns, Simon
Laing, Mrs Eleanor


Cash, William
Lait, Mrs Jacqui


Chope, Christopher
Lansley, Andrew


Clappison, James
Leigh, Edward


Clark, Rt Hon Alan (Kensington)
Letwin, Oliver


Clark, Dr Michael (Rayleigh)
Lewis, Dr Julian (New Forest E)


Clifton-Brown, Geoffrey
Lidington, David


Collins, Tim
Lilley, Rt Hon Peter


Cran, James
Lloyd, Rt Hon Sir Peter (Fareham)


Davies, Quentin (Grantham)
Lyell, Rt Hon Sir Nicholas


Davis, Rt Hon David (Haltemprice
MacGregor, Rt Hon John


& Howden)
MacKay, Rt Hon Andrew


Donaldson, Jeffrey
McLoughlin, Patrick


Duncan, Alan
Madel, Sir David


Duncan Smith, Iain
Major, Rt Hon John


Emery, Rt Hon Sir Peter
Maples, John


Fabricant, Michael
Mates, Michael


Fallon, Michael
Maude, Rt Hon Francis


Flight, Howard
Mawhinney, Rt Hon Sir Brian


Forsythe, Clifford
May, Mrs Theresa


Forth, Rt Hon Eric
Moss, Malcolm


Fowler, Rt Hon Sir Norman
Norman, Archie


Fox, Dr Liam
Ottaway, Richard


Fraser, Christopher
Paice, James


Gale, Roger
Paterson, Owen


Garnier, Edward
Pickles, Eric


Gibb, Nick
Prior, David


Gill, Christopher
Randall, John


Gillan, Mrs Cheryl
Redwood, Rt Hon John


Gorman, Mrs Teresa
Robertson, Laurence (Tewk'b'ry)


Gray, James
Roe, Mrs Marion (Broxbourne)


Green, Damian
Ross, William (E Lond'y)


Greenway, John
Ruffley, David


Grieve, Dominic
St Aubyn, Nick


Hague, Rt Hon William
Sayeed, Jonathan


Hammond, Philip
Shephard, Rt Hon Mrs Gillian


Hawkins, Nick
Shepherd, Richard


Hayes, John
Simpson, Keith (Mid-Norfolk)





Smyth, Rev Martin (Belfast S)
Waterson, Nigel


Spicer, Sir Michael
Whitney, Sir Raymond


Spring, Richard
Whittingdale, John


Stanley, Rt Hon Sir John
Widdecombe, Rt Hon Miss Ann


Streeter, Gary
Wilkinson, John


Swayne, Desmond
Willetts, David


Syms, Robert
Winterton, Mrs Ann (Congleton)


Tapsell, Sir Peter
Winterton, Nicholas (Macclesfield)


Taylor, John M (Solihull)
Woodward, Shaun


Taylor, Sir Teddy
Yeo, Tim


Trend, Michael
Young, Rt Hon Sir George


Viggers, Peter
Tellers for the Ayes:


Walter, Robert
Mr. Stephen Day and


Wardle, Charles
Mrs. Caroline Spelman.




NOES


Adams, Mrs Irene (Paisley N)
Clarke, Tony (Northampton S)


Ainsworth, Robert (Cov'try NE)
Clelland, David


Allan, Richard
Cohen, Harry


Allen, Graham
Coleman, Iain


Anderson, Donald (Swansea E)
Connarty, Michael


Anderson, Janet (Rossendale)
Cooper, Yvette


Armstrong, Rt Hon Ms Hilary
Corbett, Robin


Ashdown, Rt Hon Paddy
Corston, Ms Jean


Ashton, Joe
Cotter, Brian


Atkins, Charlotte
Cousins, Jim


Austin, John
Crausby, David


Ballard, Jackie
Cryer, John (Hornchurch)


Barnes, Harry
Cunningham, Rt Hon Dr Jack


Battle, John
(Copeland)


Beard, Nigel
Cunningham, Jim (Cov'try S)


Beckett, Rt Hon Mrs Margaret
Curtis-Thomas, Mrs Claire


Begg, Miss Anne
Dalyell, Tam


Bell, Stuart (Middlesbrough)
Darvill, Keith


Benn, Rt Hon Tony
Davey, Edward (Kingston)


Bennett, Andrew F
Davey, Valerie (Bristol W)


Benton, Joe
Davidson, Ian


Bermingham, Gerald
Davies, Rt Hon Denzil (Llanelli)


Best, Harold
Davies, Geraint (Croydon C)


Betts, Clive
 Dawson, Hilton


Blackman, Liz
Dean, Mrs Janet


Blears, Ms Hazel
 Denham, John


Blizzard, Bob
Dismore, Andrew


Borrow, David
Dobbin, Jim


Bradley, Keith (Withington)
Dobson, Rt Hon Frank


Bradley, Peter (The Wrekin)
Donohoe, Brian H


Bradshaw, Ben
Doran, Frank


Brake, Tom
Dowd, Jim


Breed, Colin
Drown, Ms Julia


Brinton, Mrs Helen
Dunwoody, Mrs Gwyneth


Buck, Ms Karen
Eagle, Angela (Wallasey)


Burgon, Colin
Eagle, Maria (L pool Garston)


Burnett, John
Edwards, Huw


Butler, Mrs Christine
Efford, Clive


Cable, Dr Vincent
Ennis, Jeff


Caborn, Rt Hon Richard
Fearn, Ronnie


Campbell, Alan (Tynemouth)
Fitzsimons, Lorna


Campbell, Mrs Anne (C'bridge)
Foster, Rt Hon Derek


Campbell, Rt Hon Menzies
Foster, Don (Bath)


(NE Fife)
Foster, Michael Jabez (Hastings)


Campbell, Ronnie (Blyth V)
Foulkes, George


Campbell-Savours, Dale
Galloway, George


Cann, Jamie
Gapes, Mike


Caplin, Ivor
Gardiner, Barry


Casale, Roger
George, Bruce (Walsall S)


Caton, Martin
Gerrard, Neil


Cawsey, Ian
Gibson, Dr Ian


Chapman, Ben (Wirral S)
Gilroy, Mrs Linda


Chaytor, David
Godsiff, Roger


Chidgey, David
Goggins, Paul


Clapham, Michael
Golding, Mrs Llin


Clark, Rt Hon Dr David (S Shields)
Gordon, Mrs Eileen


Clark, Paul (Gillingham)
 Griffiths, Nigel (Edinburgh S)


Clarke, Eric (Midlothian)
Griffiths, Win (Bridgend)


Clarke, Rt Hon Tom (Coatbridge)
Grocott, Bruce






Gunnell, John
McNulty, Tony


Hall, Patrick (Bedford)
MacShane, Denis


Harris, Dr Evan
Mactaggart, Fiona


Heal, Mrs Sylvia
McWalter, Tony


Healey, John
Mahon, Mrs Alice


Heath, David (Somerton & Frome)
Mallaber, Judy


Henderson, Doug (Newcastle N)
Mandelson, Rt Hon Peter


Henderson, Ivan (Harwich)
Marsden, Gordon (Blackpool S)


Hepburn, Stephen
Marsden, Paul (Shrewsbury)


Heppell, John
Marshall, David (Shettleston)


Hesford, Stephen
Marshall-Andrews, Robert


Hewitt, Ms Patricia
Martlew, Eric


Hill, Keith
Maxton, John


Hinchliffe, David
Meacher, Rt Hon Michael


Hodge, Ms Margaret
Meale, Alan


Hoey, Kate
Merron, Gillian


Hood, Jimmy
Michie, Bill (Shef'ld Heeley)


Hoon, Geoffrey
Miller, Andrew


Hopkins, Kelvin
Moffatt, Laura


Howarth, George (Knowsley N)
Moonie, Dr Lewis


Howells, Dr Kim
Moran, Ms Margaret


Hoyle, Lindsay
Morris, Ms Estelle (B'ham Yardley)


Hughes, Ms Beverley (Stretford)
Mountford, Kali


Hughes, Kevin (Doncaster N)
Mowlam, Rt Hon Marjorie


Humble, Mrs Joan
Mudie, George


Hurst, Alan
Mullin, Chris


Hutton, John
Murphy, Denis (Wansbeck)


Iddon, Dr Brian
Murphy, Rt Hon Paul (Torfaen)


Illsley, Eric
Naysmith, Dr Doug


Ingram, Rt Hon Adam
Oaten, Mark


Jackson, Ms Glenda (Hampstead)
O'Brien, Bill (Normanton)


Jackson, Helen (Hillsborough)
O'Brien, Mike (N Warks)


Jamieson, David
O'Neill, Martin


Jenkins, Brian
Öpik, Lembit


Johnson, Alan (Hull W & Hessle)
Palmer, Dr Nick


Johnson, Miss Melanie
Pearson, Ian


(Welwyn Hatfield)
Pendry, Tom


Jones, Barry (Alyn & Deeside)
Perham, Ms Linda


Jones, Helen (Warrington N)
Pickthall, Colin


Jones, Jon Owen (Cardiff C)
Pike, Peter L


Jones, Dr Lynne (Selly Oak)
Plaskitt, James


Jones, Martyn (Clwyd S)
Pollard, Kerry


Jowell, Rt Hon Ms Tessa
Pope, Greg


Kaufman, Rt Hon Gerald
Pound, Stephen


Keeble, Ms Sally
Prentice, Ms Bridget (Lewisham E)


Keen, Alan (Feltham & Heston)
Prentice, Gordon (Pendle)


Keen, Ann (Brentford & Isleworth)
Prescott, Rt Hon John


Keetch, Paul
Primarolo, Dawn


Kelly, Ms Ruth
purchase, Ken


Kemp, Fraser
Quin, Rt Hon Ms Joyce


Kidney, David
Quinn, Lawrie


Kilfoyle, Peter
Raynsford, Nick


King, Andy (Rugby & Kenilworth)
Reed, Andrew (Loughborough)


King, Ms Oona (Bethnal Green)
Reid, Rt Hon Dr John (Hamilton N)


Kirkwood, Archy
Rendel, David


Kumar, Dr Ashok
Robertson, Rt Hon George


Ladyman, Dr Stephen
(Hamilton S)


Lawrence, Ms Jackie
Roche, Mrs Barbara


Laxton, Bob
Ross, Ernie (Dundee W)


Lepper, David
Rowlands, Ted


Leslie, Christopher
Roy, Frank


Lewis, Ivan (Bury S)
Ruddock, Joan


Lewis, Terry (Worsley)
Russell, Bob (Colchester)


Liddell, Rt Hon Mrs Helen
Ryan, Ms Joan


Linton, Martin
Salter, Martin


Livingstone, Ken
Sarwar, Mohammad


Lloyd, Tony (Manchester C)
Savidge, Malcolm


Llwyd, Elfyn
Sedgemore, Brian


Lock, David
Shaw, Jonathan


McAvoy, Thomas
Sheldon, Rt Hon Robert


McDonagh, Siobhain
Shipley, Ms Debra


McDonnell, John
Simpson, Alan (Nottingham S)


McFall, John
Singh, Marsha


McIsaac, Shona
Smith, Rt Hon Andrew (Oxford E)


McKenna, Mrs Rosemary
Smith, Angela (Basildon)


Mackinlay, Andrew
Smith, Jacqui (Redditch)





Soley, Clive
Twigg, Stephen (Enfield)


Spellar, John
Tyler, Paul


Steinberg, Gerry
Vaz, Keith


Stevenson, George
Walley, Ms Joan


Stott, Roger
Ward, Ms Claire


Stringer, Graham
Wareing, Robert N


Stuart, Ms Gisela
Webb, Steve


Stunell, Andrew
Whitehead, Dr Alan


Sutcliffe, Gerry
Wicks, Malcolm


Taylor, Rt Hon Mrs Ann
Williams, Rt Hon Alan


(Dewsbury)
(Swansea W)


Taylor, Ms Dari (Stockton S)
Williams, Alan W (E Carmarthen)


Temple-Morris, Peter
Williams, Mrs Betty (Conwy)


Thomas, Gareth (Clwyd W)
Willis, Phil


Thomas, Gareth R (Harrow W)
Wills, Michael


Timms, Stephen
Winnick, David


Tipping, Paddy
Wise, Audrey


Tonge, Dr Jenny
Wood, Mike


Trickett, Jon
Wright, Anthony D (Gt Yarmouth)


Turner, Dennis (Wolverh'ton SE)



Turner, Dr Desmond (Kemptown)
Tellers for the Noes:


Turner, Dr George (NW Norfolk)
Mr. Mike Hall and


Twigg, Derek (Halton)
Jane Kennedy.

Question accordingly negatived.

Mr. Edward Leigh: I beg to move amendment No. 8, page 15, line 20, leave out '2000–01' and insert '2001–02'.
The amendment enables us to have what I trust will be an interesting debate on the married couples allowance, what it seeks to do, how it is to be phased out and the timing of that phasing out. I hope that it will also give us an opportunity to discuss whether the tax system should be neutral in determining people's behaviour. That view is commonly held on both sides of the House, but it is not my view. I believe that the tax system has a real role to play in determining people's behaviour and encouraging behaviour and a way of life that is useful to society. That is not to cast a judgment on other sorts of behaviour but to say that, generally, as every research study shows, marriage is a good thing. Apparently, the whole House believes that.
Whether we should take the next step and say that, having determined that marriage is a good thing, we should use the tax system to encourage it is a different question. It happens to be a question to which I would answer a strong yes, because I believe that the tax system has a useful role to play. It can be used in many other areas to encourage share ownership, private health insurance or pensions provision. That happens to be my personal view. I hope that we can discuss that matter in the context of the amendment, because it is very important.
I welcome the belated recognition by the Treasury that, over the years, the tax system has moved against families in favour of single people without dependants, and that move needs to be reversed. I also welcome the attack that the Treasury seeks to lead on child poverty. However, we should use this debate to question the Government more closely on the figures in the Red Book. Abolishing the married couples allowance in the year that is proposed sends out the wrong message. It seems to devalue marriage, and to take money away from families and give it to other taxpayers.


In certain circumstances, the effect of all those complex changes appears to take money away from families who are poorer and give it to families who are better off.

The Second Deputy Chairman: Order. I appreciate that the hon. Gentleman is only just starting his remarks, but I remind him and the Committee that the amendment is specifically about the date of implementation, not the wider issues.

Mr. Leigh: I can deal in a moment with the introduction of the children's tax credit because that is particularly relevant to this amendment. The married couples allowance will be repealed in April 2000 and the children's tax credit will be introduced a year later. In the previous debate, the Minister made it clear that she was hoping to use this debate to discuss the children's tax credit. Let us see how much effect the children's tax credit will have. I do not believe that much will be achieved by having a year's delay between the repeal of the married couples allowance and the introduction of the children's tax credit.
The children's tax credit is a recognition, for the first time since the mid-1970s, of the lower taxable capacity of taxpayers with families. That is a welcome step. However, if we look at it in greater detail, we see not only that it is being introduced a year too late but that it does not solve all the problems that the Treasury would have us believe that it will solve. The children's tax credit will give families £416 a year, which, I agree, compares favourably with the cash value of the married couples allowance. In 1999–2000, the married couples allowance will be £197, but if one looks back to what the value of the married couples allowance was when it was introduced in 1990, one can calculate that it would be worth, in today's money, about £522.

Mr. Geraint Davies: It is not £522 because the previous Conservative Government cut it. It is ridiculous to make those suggestions when the Conservative party made the cuts that bring us to the position that we are in now.

Mr. Leigh: First, we are entitled to look at what is being proposed. Secondly, there is a great deal of difference between cutting something and abolishing it entirely. That is what we are faced with today. It does not help us, when we are dealing with serious matters, if hon. Members trade petty party political points across the Chamber. We are entitled to debate the married couples allowance and to advocate it as a benefit that helps married couples. We should not get too fixed on who reduced it when. Had the hon. Gentleman listened to my remarks, he would have known that I was trying to be fair to the Government. I was not attacking them from the word go, but was congratulating them on what they were trying to achieve by the introduction of the children's tax credit. We do not advance our arguments much by dwelling on the past.

Mr. Brazier: Was not that intervention characteristic of attacks made by Labour Members? Is it not possible that some of the people who voted for them, including traditional Conservative voters, might have wished to see

changes in this matter because they were disappointed that the previous Conservative Government did not speak up for marriage?

Mr. Leigh: Exactly. Hon. Members are entitled to put their point of view. We all know that, in the real world in which we operate, there are party disciplines and sometimes one has to vote not necessarily according to one's conscience, but that still allows one to speak up for what one believes in the Chamber. If we cannot speak up in this Chamber, where else can we do so?
I was pursuing the question of the children's tax credit, which is vital to this debate because of the year's delay in its introduction. Many families will not get the credit because it will be gradually withdrawn where one parent is a higher-rate taxpayer. That will not be done in a fair way and, in practice, the proposals will discriminate against married couples. As the proposals stand—the Minister can correct me when she winds up the debate if I am wrong—the CTC will be withdrawn from some families, whereas other families on much larger incomes will get the credit in full. For example, if one spouse is a higher rate taxpayer with an income of £33,000 and the other has nil income, the children's tax credit will be cut. It will be removed completely once the income has reached £38,000. A family with two incomes totalling £64,000—so neither of them is a higher rate taxpayer—may receive the CTC in full. That is profoundly unfair.
6 pm
The Minister must explain the delay between the abolition of one tax benefit and the introduction of another. I hope that she will not regale the Committee with comments about how marvellous the CTC is without explaining that fundamental unfairness. The proposal is grossly unfair and shows no regard for the needs of children. It will also discriminate against marriage, as couples who are co-habiting in a loose arrangement could, through ignorance, misunderstanding or fraud, fail to recognise when liability arises.
In the Budget, the Chancellor is not only ignoring marriage, but is structuring his proposals in a way that disadvantages married couples, especially those who sacrifice income to care for their children or elderly dependants. For the reasons that I have given, I believe that the proposals will encourage fraud. Surely a fairer solution would be to provide for the credit to go to the caring spouse or to allow married couples to pool their allowances and reliefs. This measure does not permit that.
Why is this issue important? The Chancellor of the Exchequer said:
The tax system sends critical signals about … activities that a society wishes to promote or deter."—[Official Report, 2 July 1997; Vol.297,c.311.]
As the Chancellor has said that, the Government must explain to the Committee why there is a year's delay. I can conclude only that, by their decision to end the married couples allowance in the year that it is being ended, the Government are sending a clear signal that there is no value in marriage—certainly in the tax system—for children or for anyone else. That is completely contrary to what other people in the Government are saying.
The Home Secretary's consultation document "Supporting Families" recognises that marriage is still the surest foundation for raising children. In the Budget, the


Chancellor highlighted the fact that £4 billion of new money was being made available to families. Much of that new money is tied up in the children's tax credit and the working families tax credit, which no doubt the Minister will make a great deal of when she replies to the debate. I do not pretend to know what is in her briefing documents, but I am sure that that will be the nature of her defence against this attack.

Dawn Primarolo: The hon. Gentleman will know that the creation of the children's tax credit is dealt with in clause 27, which we are not discussing. We are discussing the abolition of the married couples allowance. Although I shall do my best to respond to the hon. Gentleman, I am sure that Mr. Lord will keep me in order. I plead with the hon. Gentleman not to give me an impossible task. If he stays in order, I can deal with everything.

Mr. Leigh: I assure the hon. Lady that I certainly do not want to place so courteous a Minister in an impossible situation.
Whatever is said in defence of the figures in the Budget, the reality is that families, particularly married couples, will receive much less than we were led to believe on 9 March. The Red Book reveals that there is only £400 million of new money for families in 1999–2000, and that there will be a cut of £125 million in 2000–01 and £940 million in 2001–02. That is why the date when the married couples allowance is to be phased out is important.
The Government are shuffling money around. They are taking more from some families and giving it to others. The Government will say that they are taking money from better-off families and giving it to poorer families. That is the nature of their defence. However, research has shown that many families who will lose out as a result of these Budget measures will be worse off than families who will benefit. It is difficult to make one's way through the complexities of the proposals to phase out the married couples allowance and to introduce the children's tax credit and the working families tax credit, but that will be the result.
We were told that the saving in a full year from the withdrawal of the married couples allowances would be sufficient to fund a children's tax credit of £10 a week—not £8 a week as proposed in the Red Book. So families lose out again. Where is that missing £2, and what is being done with it?
The Chancellor and the Paymaster General are claiming that, as a result of the Budget policies, including the scrapping of the married couples allowance, all families will have a minimum income of £200 a week, and that no net income tax will be paid until earnings exceed £235 a week. In his Budget speech, the Chancellor said:
Every working family will be guaranteed a minimum income. It will be introduced in October … at £200 a week—more than £10,000 a year. No income tax will be paid until earnings reach £235 a week."—[Official Report, 9 March 1999; Vol.327,c.187.]
That statement was repeated in the Red Book, which said that
no family earning less than £235 a week (over £12,000 a year) will pay any income tax from October 1999.
It was also repeated in the Treasury's Budget press release on Budget day, which spoke about
a minimum income guarantee of £200 a week for every family with a full-time earner.
It was repeated by the Paymaster General in her speech on Third Reading of the Tax Credits Bill.
Although those statements are correct for the majority of families, they are not correct for all families. The Government must deal with that point. They assume that the family will get the working families tax credit. Families do not receive any working families tax credit if they have savings—for instance, following redundancy—of £8,000. Why are we discriminating against families who happen to have modest savings?
I agree with the Government that it is right for the tax benefits system to look after lone parents. Many of them are lone parents through no fault of their own, and there is no reason why the tax system should not look after them, but the Chancellor is doing so at the expense of couples. That is the point that we are making, and that is what is unfair. In particular, it is at the expense of married couples who provide greater security for children. That is not an attack on lone parents. If we want to help lone parents, the right way is not to discriminate against married couples.
In the Budget, married couples are disadvantaged at every turn. That is not a fair way of proceeding. Although the Chancellor claims to be introducing a fair tax system, it is one that takes no account of the costs of a second adult. The Government defend their proposals by saying that they can afford to get rid of married couples allowance on that date because of the new and improved working families tax credit. That takes no account of the additional costs of the second adult.

Mr. Hayes: My hon. Friend will have received the same complaints in his Lincolnshire constituency as I have had in my Lincolnshire constituency from married couples who are childless but poor. The problem is exacerbated for elderly or disabled married couples. For those people, there is not simply a gap, but a gulf.

Mr. Leigh: Yes, for people on good incomes there is a gap, but for poorer families there may be a devastating gulf that can put them in real poverty. The other point that we are trying to put across in this debate is that, if one works one's way through the complexity of these proposals, one finds that insufficient account is taken of the costs of children.
The main point that we want to make is that single earner couples are particularly disadvantaged. One partner sacrifices his or her prospects—it is usually her prospects—to stay at home to look after children. Those people will continue to be singularly disadvantaged. The national child care strategy is designed to give parents a genuine choice but, in practice, all the resources will go towards supporting professional child care, and none will be explicitly directed towards carers at home. That is what worries us.

Dawn Primarolo: This Government have substantially increased child benefit, something that the hon. Gentleman's Government failed to do. We have been responsible for the largest increases since the introduction of the benefit. Moreover, the benefit goes directly to the carer, regardless of his or her employment status.

Mr. Leigh: Of course I welcome the increase in child benefit—indeed, I would have to declare an interest if I


did not—but the Paymaster General's intervention does not address the point that we are making. It is a red herring, because child benefit goes to families of all kinds. My point, with which the hon. Lady will probably find it difficult to deal, is that the Budget proposals are directed entirely towards families on relatively low incomes, in which one parent—normally the mother—stays at home. It is not a question of the Budget's being tax neutral, although in my view that is bad enough.

The Second Deputy Chairman: Order. The hon. Gentleman must tell the Committee why the date of implementation is important.

Mr. Leigh: You will be pleased to hear, Mr. Lord, that, having explained the broad philosophy on which my view is based, I am about to deal with the specific question of why the date is important. It is important because the Government have deliberately structured all their proposed changes to ensure that they are introduced—dare I say it—by stealth. [HON. MEMBERS: "No."] It is true. The Government know that the phasing out of the married couples allowance is deeply unpopular, and are trying to convince the nation, and the Committee, that we need not be over-concerned about it because of the increase in child benefit—which will be introduced in 2000—and the introduction of children's tax credit. Children's tax credit, however, will not be introduced until a year after the abolition of the married couples allowance.
I want to know the reason for that gap year. No doubt the Paymaster General will be able to deal with my question very easily. What argument can possibly be adduced to justify a gap that could make things very difficult for couples?
The children's tax credit will disadvantage single-earner couples. The fairness that the Chancellor seeks will not be conferred by a system that withdraws credit from single-earner couples with an income of £38,000. That point, surely, is unanswerable.
The Government face an important task. Those who look at the figures will end up with the unalterable conviction that married couples are being attacked, and that married couples in which one partner stays at home are being attacked particularly viciously. Why are the Government, in order to save a little money—

Mr. Flight: rose—

Mr. Leigh: I am about to finish my speech, but I will give way to my hon. Friend.

Mr. Flight: In the case of a married couple with six children, the wife may well stay at home to look after those children. It is not just married couples who are likely to suffer; married couples with large families are likely to suffer, and it is they who need support most.

Mr. Leigh: I do not know why my hon. Friend gives the example of a married couple with six children, but that is a situation that I know quite intimately. Therefore, I can only agree with my hon. Friend.
I hope that the Paymaster General will give us some information about the gap year. I also hope that—subject to your strictures, Mr. Lord—she will explain why the

married couples allowance, which has figured so prominently in our public life for the best part of the century, should now be abolished.

Mr. Geraint Davies: What is a "stealth tax"? Is it a stealth tax to abolish a tax, as we intend to do, or is it a stealth tax to eat away gradually at an allowance, as the Tories did? That was stealth. We are being very open about what we are doing: the allowance is being abolished. Let us get that out of the way, and go straight to the nuts and bolts of the amendment rather than meandering. Let us analyse the amendment, and what its impact would be.
The amendment assumes that the introduction of children's tax credit represents a direct substitution for the married couples allowance. That is a false assumption. I do not know whether it is based on mischief, or has been cobbled together on the basis of misunderstanding and ignorance.

Mr. Gibb: rose—

Mr. Davies: I want to know from the hon. Gentleman whether it was ignorance or mischief.

Mr. Gibb: It was the hon. Gentleman's Chancellor of the Exchequer who said in his Budget statement that he would replace the married couples allowance with the children's tax credit.

Mr. Davies: The hon. Gentleman clearly did not listen carefully enough. It seems that it is a mixture of ignorance and mischief. In fact, the children's tax credit is not a direct substitute for the married couples allowance, and was never intended to be. As the Chancellor said himself, this is a broader strategy, in which we abolish the married couples allowance as part of a policy to support families.
As important as the children's tax credit is the working families tax credit, which kicks in in October 1999. It is part of the same strategy. What about that—and what about the fact that child benefit has already risen by £2.50? Any fool can see that those are not simultaneous, equal substitutions. By virtue of the working families tax credit, the children's tax credit starts in October 1999.

Mr. Hayes: The hon. Gentleman says that those developments are unrelated, but is not the net effect less money for families, including needy families, and more for the Chancellor? Presumably the hon. Gentleman believes in the redistribution of wealth; this, surely, does not represent that in any sense.

Mr. Davies: Families will receive much more money. In the case of the hon. Gentleman, it is ignorance; in the case of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), it is mischief.
As part of our strategy, we are introducing the biggest-ever increase in child benefit. The working families tax credit kicks in in October 1999, and, a year or so later, there will be even more good news for families in the form of the children's tax credit. The hon. Member for Gainsborough (Mr. Leigh), who moved the amendment, asked why we had delayed. That suggests that the amendment was, in fact, prompted by ignorance.


If they think about it, hon. Members will realise that the working families tax credit is quite a complicated system. Do we really want to introduce the children's tax credit at the same time, in view of the practicalities of its administration by the Inland Revenue, and families' ability to understand it enough to claim it? The answer, of course, is no. That is why we are introducing the working families tax credit before the children's tax credit. It makes a great deal of sense.
The amendment implies that a substitution is involved, and accordingly makes assumptions about costs and values. In fact, as has already been said, the children's tax credit is much more valuable than the married couples allowance in the case of married couples with children, and the Government are targeting their resources accordingly. The married couples allowance is worth £197; the children's tax credit will be worth a massive £416. We are giving benefits where they are needed. There have been no substitutions or replacements. Therefore, amendment No. 8 is entirely fallacious.
Delaying abolition by one year would cost the Exchequer £2 billion. Once again, I ask the Opposition from where they would find that money—from stealth taxes, or by cuts to family benefits? The hon. Member for Bognor Regis and Littlehampton—"the Rumbler", as he is now known—will have to explain which it will be. Moreover, if we add that £2 billion to the long-term costs—the discounted value of providing the married couples allowance to all future pensioners—that would have been created by passing amendment No. 1, we should have to know what other stealth taxes and cuts the Opposition are considering.
Thank goodness—for the taxpayer and for families—that the Government are moving ahead with our agenda.

Mr. Brazier: I support amendment No. 8, which is an excellent amendment, for two reasons. The first—my hon. Friend the Member for Gainsborough (Mr. Leigh) has already very strongly made this case—is that the Government plan a one-year gap between abolishing the married couples allowance and introducing the children's tax credit.
The second is that deferring abolition of the married couples allowance for one year would allow a proper period in which to reconsider the tax system's role in properly recognising marriage. Such a period would also allow time for examination of some of the technical arguments made by Labour Members, and for consideration of some of the imaginative ideas of Opposition Members on how the system might better recognise marriage.
My hon. Friend the Member for Gainsborough, in describing the one-year gap between abolition of the married couples allowance and introduction of the children's tax credit, not only touched on an argument made in the previous debate, but anticipated the Minister's argument that the working families tax credit, for example, will provide extra money for families.

Liz Blackman: When the previous Government significantly reduced the married couples allowance, was not their "gap" strategy to freeze child benefit?

Mr. Brazier: As 1 made clear in an earlier debate, I shall not defend the previous Government's record on

the matter. As someone who has written much stating that the issue lost us a lot of support, I tell the hon. Lady that if she or any other Labour Member went to the polls saying that developing that strand of Conservative policy was the best way forward, full marks to her—but I should like to see the evidence.

Mr. Dale Campbell-Savours: What does that mean?

Mr. Brazier: It means that cutting the married couples allowance was a mistaken policy, and that it would be an even greater mistake to abolish it.

Mr. Andrew Love: Will the hon. Gentleman give way?

Mr. Brazier: No, I shall not. I have only just started my speech, and I should like to develop my point.
One year after abolition of the married couples allowance, the children's tax credit will be introduced. The CTC and the working families tax credit—which will already be in place—are both means-tested benefits. I know that you, Mr. Lord, would stop me if I were to develop that point at length. However, Labour Members addressed the issue in the previous debate, and I should like to make the point that we are debating not only the issue of putting money into people's pockets, but the signals that we are sending in doing so.
The WFTC will cause vast numbers of families to face huge marginal tax rates and benefits withdrawal. The married couples allowance is a universal measure, and it creates no such traps. Moreover, as has already been said, the married couples allowance benefits most those who are the lowest paid. The wealthy do not notice an extra pound or two. Those who most notice that money are those who are close—but not quite close enough—to the benefits entitlement level.

Mr. Gardiner: If it is true that those who do need the allowance appreciate it, and that the wealthy do not notice it, should not the Government be targeting resources on those who need the allowance and will appreciate it, and not continuing to provide it to those who—in the hon. Gentleman's own words—do not notice it?

Mr. Brazier: I do not think that the hon. Gentleman heard an earlier point that I made—which I shall repeat briefly. By practising such targeting, one causes the exact problem identified by many hon. Members—including the right hon. Member for Birkenhead (Mr. Field), and, famously, the late Sir Brandon Rhys Williams, a distinguished Conservative colleague—and recognised by a huge spectrum of opinion outside the House: tapers that cause all the problems that I mentioned earlier. However, I must now speak to the narrow terms of the amendment.
The one-year gap is the first reason that I oppose the measure. Those who will most keenly feel the gap's effect are not those on income support or those at the very bottom of the benefits eligibility scale, but those who are a little above eligibility. They will lose a universal benefit, but, for a full year, will not receive CTC. Consequently, they will be less well off. Although I accept that we have to consider the overall cocktail, the working families tax credit will not make up for the problem of tax changes


and benefits withdrawal, especially—as I said in the earlier debate—for couples receiving housing benefit. The one-year gap is of the Government' own making, although, as my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibbs) said, the Chancellor was less than clear in describing it in his Budget speech.
As I said, my second reason for supporting the amendment is to give the Government a year to think again about the structure of any type of marriage allowance. Incidentally, the rather patronisingly termed "married man's allowance" was only comparatively recently renamed the married couples allowance.
Some Labour Members expressed technical objections to the current structure of the married couples allowance, and I have absolutely no doubt that we shall revisit those objections when the Minister replies to the debate. Labour Members described how some non-married people benefit from the allowance. Some Opposition Members, including the Leader of the Opposition, have made the point that the allowance would be better if it were transferable.
If we deferred the measure's implementation for a year, we could consider how we might better arrange structures for marriage support. It would be totally wrong for the House to send the signal that it does not think that marriage should be recognised in the tax system.
It is worth reiterating the point made by the Home Secretary, who is strongly committed to addressing the issues of family breakdown and its effect on young people. He said:
marriage is still the surest foundation for raising children.
If the Home Secretary believes that, why, oh why, do the Government want to abolish the married couples allowance? Why not allow an extra year to think about a better structure for recognising marriage?

Mr. Gerald Howarth: I apologise to my hon. Friend, as I shall shortly have to leave the Chamber to attend a meeting with our right hon. Friend the Leader of the Opposition. The Red Book mentions only "families". There is an aversion among Labour Members, and particularly in the Prime Minister's own mind, to mentioning the M-word—marriage. The Red Book makes no reference to marriage. The Government's measures are directed at children, but specifically avoid trying to promote marriage—although the Home Secretary says the Government are intent upon doing so.

Mr. Brazier: I am most grateful to my hon. Friend for anticipating my point. I should like to make two observations, the first of which stems clearly and directly from his words. He is absolutely right to say that it is extraordinary, especially given that the Home Secretary has bravely spoken of the importance of marriage to the system, that we should phase out the married couples allowance instead of delaying at least for a year and trying to replace it with a better structure.
Let me share with the Committee a single statistic, which can be presented in two interesting ways, which illustrate just how critical marriage is to child raising and why it would be worth taking an extra year to reconsider abolishing the married couples allowance.
The hon. Member for Kingston and Surbiton (Mr. Davey) quoted from "Social Trends 1999". My information comes from the Library's analysis of two

documents, one of which is "Social Trends 1999". I asked the following question: if a child was born 10 years ago to a married couple and if a child was born 10 years ago to an unmarried couple living in an allegedly stable relationship, what chance would there be that the parents would still be together today? The answer was 81 per cent. in respect of the former case, and a mere 15 per cent. in the latter case, unless the couple had got married during that 10 years.
If one turns the statistic the other way round—[Interruption.]

The Second Deputy Chairman: Order. We cannot have casual conversations across the Chamber. I remind the hon. Gentleman that we are discussing specific dates and I would be grateful if he returned to the amendment.

Mr. Brazier: I would be grateful for one extra sentence on this, Mr. Lord.
If one turns the statistics around, they reveal that there is a 91 per cent. chance that the unmarried parents will either get married or split up within 10 years. That is why we need an extra year to think about the proposal.

Mr. Love: Will the hon. Gentleman give way?

Mr. Brazier: In a moment.
The statistics were provided to me by the Library—

Mr. Gardiner: Will the hon. Gentleman give way?

Mr. Brazier: I should be grateful if the hon. Gentleman would let me finish my point. I said that I would give way to the hon. Member for Edmonton (Mr. Love). I have been generous in giving way and have already given way three times in seven or eight minutes.
As I said, the second case for delaying for a year is that it would provide breathing space to allow the House to consider again whether or not it wants to cast aside the best method of raising children.

Mr. Love: I thank the hon. Gentleman for giving way. I have some difficulty in understanding the relevance of his argument to the married couples allowance. Can he give the Committee any evidence of the role of the married couples allowance in maintaining marriages in this country?

Mr. Brazier: If I reply to that point, I shall risk being out of order. It has been a feature of both of this afternoon's debates that Conservative Members trying to make the case for particular amendments have been challenged by interventions from Labour Members that go well beyond the amendments, so that we are bound to go beyond the amendment in replying to them. However, I shall answer the hon. Gentleman. Given the overwhelming evidence that there is more likely to be a stable family when parents are married and that married parents are much more likely to stay together, it is at least a desirable objective that we should encourage marriage.
I would turn the hon. Gentleman's point around and ask him the following question: does he or any other hon. Member present in the Chamber really believe that the measures in a Budget have no effect at all on behaviour? If he does, I am not sure why we bother to provide tax


reliefs of one sort or another if we do not think that they affect behaviour. I am certain that many of my constituents, not all of whom support the Conservative party, see the decision to abolish the married couples allowance that is embodied in the clause—and which the amendment would defer for a year—as a severe blow against the single most important institution in the country.

Mr. Healey: The hon. Member for Gainsborough (Mr. Leigh) has tabled a narrow amendment, but introduced a rather broader debate. To that extent, he has done the House and this Committee a service.
Ultimately, one's assessment of the married couples allowance and the amendment proposing a year's delay before it is abolished depends on the view one takes of the fiscal and social purposes of the tax system in general and the married couples allowance in particular. It raises two questions. The first is whether one agrees with using the tax system to pursue particular policy aims, and the second is whether a particular tax break or allowance meets those objectives.
I believe that the tax system should support family life and not just marriage and that our first concern in providing that support must be the children, particularly the 4 million children who are growing up in poverty. The abolition of the married couples allowance, the introduction of the children's tax credit, the working families tax credit and a range of other measures have precisely that aim.
Of course, the married couples allowance is a tax credit and the same flat rate linked allowances are also payable to married couples, single parents and unmarried parents living together. In particular, as the married couples allowance can be paid out at twice the rate, individually, to separating or divorcing couples during the year of their separation, it cannot be said that it encourages or reinforces marriage. This afternoon, hon. Members on both sides of the Committee have recognised that people marry for reasons other than tax. Therefore, delaying the proposal is not the answer.
The abolition of the married couples allowance is overdue and should not he delayed as amendment No. 8 proposes. The original rationale for its predecessor, the married man's allowance, was that, in 1918, when it was introduced, marriage imposed additional burdens that needed to be recognised by the tax system. In those days, when two people got married, they became dependent on one salary. Women almost invariably gave up work when they married. That is no longer the case, as the Paymaster General pointed out during our debate on amendments Nos.1 and 2—70 per cent. of married women now work. Therefore, marriage no longer results in a fall in couples' joint income or an increase in costs or financial penalties. Indeed, one could argue that married couples without children are often better off than when they lived separately.
However, marriage has a bearing on the tax system when it has a bearing on earnings capacity. Very often—although not exclusively—marriage results in children, and women often take a career break to have, and care for, their children. At that point, there is greater dependency and increased costs and there is a case for

more support from the tax system. It is precisely where my right hon. Friend the Chancellor has stepped up support and proposes to do so further with large increases in child benefit and the introduction of the children's tax credit and the working families tax credit.
The clause, if it remains unamended, will implement the decision to end the basic married couples allowance. It also specifies the relevant dates for that implementation. Essentially, it takes to their logical conclusion the changes to the MCA introduced by successive Tory Chancellors, who, by progressively reducing the allowance from 40 per cent. to 15 per cent., were well on the way to the step proposed in the Bill.
Amendment No. 8 would simply delay the logical action that the Government propose, which is based on the November 1993 observation by the right hon. and learned Member for Rushcliffe (Mr. Clarke), who was then Chancellor of the Exchequer and who said, quite candidly and characteristically, that the married couples tax allowance was a "bit of an anomaly". The amendment would frustrate the Government's intention with clause 28, which is part of a wider move to redefine the nature and purposes of tax breaks for families and to redirect resources better to support those families and children who have extra costs and real needs.
The Government's plans are clear. There is no case for delaying the date of implementation, and I urge the Committee to oppose amendment No. 8.

Mr. Edward Davey: I agree with many of the arguments advanced by the hon. Member for Wentworth (Mr. Healey) against the amendment and against delay. He is right to say that the married couples allowance is now outdated, and he was right to recall that the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), termed it an anomaly. The money currently paid out in the married couples allowance is compounded by the tax revenue that the Exchequer thereby forgoes. The Government's proposals go some way towards using that money more effectively to support families and their children.
The faults in the stance of Conservative Members on this matter were exposed when the hon. Member for Gainsborough (Mr. Leigh) compared the tax incentive for marriage—which is what he considers the married couples allowance to be—with the tax incentives given for taking out pensions, or for employee share ownership. I suggest that marriage is not a financial undertaking. It happens for many reasons, the least of which is financial rationale.
It is sensible to have financial incentives for financial transactions such as pensions or share ownership, but not for something that is completely different. That is why the abolition of the married couples allowance should not be delayed.

Mr. Leigh: That is a fair point, but I am sure that the hon. Gentleman will agree that the tax system has been used to encourage home ownership for years. That is much more than just a financial transaction: it is the most important element in people's lives, after their personal family life. The tax system can be used to encourage behaviour that society considers useful, as society considered it useful to encourage home ownership.

Mr. Davey: I am afraid that the hon. Gentleman only emphasises my point. The problem with mortgage tax


relief is that it hurts people on low incomes. Such people often cannot get the benefit of it, and it has distorted the housing market so that social and rented housing has been less affordable. Therefore, the relief ran counter to the aim of helping families on low incomes.
One of my key arguments in this debate is that the married couples allowance did not assist marriage or families. Like the hon. Member for Gainsborough, I believe that we need a set of policies to promote marriage and to keep families together, but we should not look to the tax system to achieve them.
In this debate, Conservative Members have put forward four fallacies about family policy. First, they are considering only one aspect of public policy and ignoring a range of matters that are much more germane to the promotion of the family. For example, they have forgotten the benefits system—family credit, child benefit and housing benefit, and so on. Many of those aspects of public policy are far more relevant to the aim of sustaining families and the institution of marriage.
6.45 pm
Other elements that seem to have been ignored include education policies governing school hours, the national curriculum and our attitude to sex education. Also important are employment policies with respect to child care, parental leave and working hours. Those areas of public policy would be far more fruitful for the promotion of the family. Often, families are torn apart because their members rarely meet, with parents hardly ever seeing their children or each other because they work such long hours outside the home.

The Second Deputy Chairman: Order. I wonder whether the hon. Gentleman can now relate his remarks to the date of implementation.

Mr. Davey: I take your direction in this matter, Mr. Lord, but I make these points because I believe that the married couples allowance is outdated and should be got rid of as soon as possible. We should pursue other policies to promote the family and marriage. The sooner that the MCA is abolished—and the sooner that the resources spent on it are used elsewhere—the better. I know that my initial remarks were some way off the topic, Mr. Lord, but they were germane.
Far more important than the retention of the married couples allowance is the support that the Government give to relationship counselling, especially to Relate, the former Marriage Guidance Council. Government support for such counselling would go much further towards achieving the objectives of the hon. Member for Gainsborough.
The second fallacy trotted out in the debate is that people marry for tax reasons. If that were true, the divorce rate would not have risen and people would not marry increasingly later in life. As the section on household and families in "Social Trends 1999" states:
Between 1971 and 1996 the average age in Great Britain at first marriage rose from 25 years to 29 years for men and from 23 years to 27 years for women.

If the married couples allowance had given people an incentive to get married, and thus supported the institution of marriage, the trend would have been in the opposite direction.

Mr. Brazier: The married couples allowance fell in that period, so if the direct linkage that the hon. Gentleman seeks does in fact exist, the argument is exactly the other way around.

Mr. Davey: For most of that period, the allowance did not fall, and in some Budgets it was increased above indexation. I am afraid that the hon. Gentleman's point is therefore not valid.

Mr. Brazier: Except for one year, at no time did the allowance go up by more than the combined rate of prices and economic growth. As a proportion of income, it did not rise, and in several of the years it fell. If anything, the argument is slightly against the hon. Gentleman, whose point could stand only if the married couples allowance had risen consistently in each year of the period that he has quoted. For my sins, I used to be a professional statistician and I urge the hon. Gentleman to think about what he is suggesting.

Mr. Davey: We could bandy about our recollections of when Budgets put the married couples allowance above indexation and when they did not, but the truth is that, in the period to which I referred, the average age at marriage rose. The supposed tax incentive in the allowance had no contrary effect.
It is symptomatic of many of the attitudes to social policy among Conservative Members that they are very atomistic in their approach. Conservative Members look at such matters in the same way as they look at balance sheet calculations. People's lives are not like that. People do not take decisions in that narrow, financially driven way. Decisions are taken for many other reasons.
The third fallacy, and another reason why married couples allowance should be abolished this year, is the apparent belief of the Conservatives that it has been a good way to support marriage and the family. The record does not show that to be so. Indeed, Conservative Chancellors did not think so. It is a mystery why Conservative Members are not more shamefaced about all this. When their Chancellors reduced the value of the married couples allowance, they did not often redeploy the saved resources into family friendly policies such as increased child benefit or child care support.

Mr. Brazier: indicated assent.

Mr. Davey: I am pleased that the hon. Gentleman has the honesty to nod in affirmation. The Conservatives must at least admit that the Government are putting resources into support for children and families.
The hon. Gentleman said that one reason for Conservative opposition to the delay was that the children's tax credit was not being introduced until next year. However, the Conservatives seem conveniently to have forgotten that child benefit has been increased, and will be increased further. The working families tax credit is also coming in, as is the child care tax credit. A back-of-an-envelope calculation would show that families


with children are far better off as a result of that package of measures than they would be if we had simply retained the married couples allowance.
That is not to say that the Liberal Democrats have no criticism of the Government's family policy and the collection of tax benefits that they are giving to families with children. As I said on Second Reading, they are producing a complex system of support for families with children, including child benefit, the children's tax credit, working families tax credit and the child care tax credit. People are confused about this complex system of support. However, the Government are giving support, and we welcome the changes to that extent.
The Liberal Democrats will vote against amendment No. 8 because the Government are following the logic of their predecessors by saying, as Conservative Chancellors admitted, that the married couples allowance does not achieve the ends that people seek. There are far better ways to support marriage and the family. I hope that the Committee will reject the amendment.

Mr. Gibb: I support the amendment and congratulate my hon. Friend the Member for Gainsborough (Mr. Leigh) on his excellent introductory speech. One of the most glaring sleights of hand, pocketing £1.4 billion for the Chancellor, was the putting into effect of the children's tax credit a full year after abolition of the married couples allowance. It is sheer hypocrisy for the Chancellor to claim, as he did in his Budget speech, that the married couples allowance is being replaced by the children's tax credit.
The amendment brings the dates together. The abolition of married couples allowance is just another stealth tax that will increase income tax bills. The delay of a year before introduction of the children's tax credit is a further revenue-raising ruse that will be widely recognised for what it is.

Dawn Primarolo: The hon. Member for Gainsborough (Mr. Leigh) made several suggestions about resources being provided for families. My right hon. Friend the Chancellor made it clear in his Budget speech that family life is the foundation of our society. Our first principle is support for the family, and the interests of children must be paramount.
Many points made in both debates this evening have been about the married couples allowance. It was originally provided for married men, from 1918, in recognition of the fact that their wives were not in paid employment after marriage. That lasted until just before the second world war when the Government of the day advanced tax policy to encourage married women to stay in the labour market or return to it.
After years of amendment and change, the present Government inherited a married couples allowance that is, in fact, restricted neither to marriage nor to couples. Nor, indeed, is it strictly an allowance, as it is a tax credit paid at the same flat rate to married couples, single parents and unmarried parents who live together. Far from recognising marriage, as the hon. Member for Gainsborough suggested, the allowance is so confused that it can even be paid twice—at the full rate to both partners in the year of separation or divorce. A married

couples allowance that can pay more for separation or divorce surely cannot be said to uphold the institution of marriage.

Mr. Brazier: The point made several times by Conservative Members is that anomalies of that sort could be ruled out by having a year's delay. There is a serious underlying issue to the amendment, not just a technical objection.

Dawn Primarolo: I shall come shortly to the points made by the hon. Members for Bognor Regis and Littlehampton (Mr. Gibb)—whose incorrect understanding of the Budget we heard, once again, from the Dispatch Box—for Canterbury (Mr. Brazier) and for Gainsborough. The hon. Member for Kingston and Surbiton (Mr. Davey) was quite correct in what he said about what is being provided to families.
First, however, I shall outline some facts. Child poverty has increased dramatically since 1979. The bottom 10 to 20 per cent. of children have lower real incomes now than in 1979. The United Kingdom has one of the highest rates of child poverty in the industrialised world. The Chancellor is seeking specifically to help families with children whose budgets are under enormous pressure. Many of them are trapped in poverty.
The hon. Member for Gainsborough said that the proposals for the children's tax credit were less generous than the married couples allowance would have been if it was indexed. He mentioned £552, but he did not say that the base year for that was 1990. He was referring to the value of the married couples allowance before the Conservative Government made substantial cuts—what we would now, I think, call a stealth tax.
Had the hon. Gentleman made his comparison with the value of married couples allowance inherited by the Labour Government, he would have been talking about something like £274.50 a year. The children's tax credit provides £416 a year, and one need not be a mathematical genius to work out that that is far more generous.
The second Opposition proposition was that there was a gap year—that we were taking £197 a year away from the families with children upon whom Conservative Members have concentrated, and made no other policy changes. The hon. Gentleman said that, as a parent, he was in receipt of child benefit, so I remind him that child benefit was increased by £2.95 this month, and that next April there will be another increase, with the premium for the second child also going up. For families with more than one child, those increases in child benefit alone are worth more than the loss of the married couples allowance—and the Government have done more than that.
The idea that the hon. Member for Bognor Regis and Littlehampton advanced—that there is a gap year, and that we are stealing funds from families—ignores the fact that the working families tax credit will be increased by £4.70 a week from October, before the married couples allowance is taken away. There is no gap year. Resources greater than the married couples allowance, which has yet to be taken away, are being given to families with children. The additions will be paid before the allowance disappears, and they will also receive the children's tax credit.
After all the discussion about marriage, and all the importance that Conservative Members have attributed to the married couples allowance, what is their proposition?


They suggest not that the allowance should be saved, but that its abolition should be delayed for a year—that we should allow the present chaos surrounding the allowance to continue.
7 pm
Presumably, the Conservatives want to vote against the increase in child benefit and the working families tax credit, and the increase in the income support premium, which have all been provided for this year, before the married couples allowance is abolished. That fact does not fit in with their simplistic argument that the Chancellor is taking money away and hiding it in the Treasury rather than paying it out.
It is clear from the information in the Red Book, and from what I have said this evening, that families with children in the greatest need will receive payments from the Government to help them. The best way to help married couples and families is to ensure that they and their children can be lifted out of poverty. What drives families apart is a lack of resources and the grind of poverty, and that is where the Government are trying to help. I urge the Committee to reject the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 131, Noes 296.

Division No. 154]
[7.3 pm


AYES


Ainsworth, Peter (E Surrey)
Gill, Christopher


Amess, David
Gorman, Mrs Teresa


Ancram, Rt Hon Michael
Gray, James


Arbuthnot, Rt Hon James
Green, Damian


Atkinson, Peter (Hexham)
Greenway, John


Baldry, Tony
Grieve, Dominic


Beggs, Roy
Gummer, Rt Hon John


Beresford, Sir Paul
Hamilton, Rt Hon Sir Archie


Boswell, Tim
Hammond, Philip


Bottomley, Rt Hon Mrs Virginia
Hawkins, Nick


Brady, Graham
Hayes, John


Brazier, Julian
Heald, Oliver


Brooke, Rt Hon Peter
Heathcoat-Amory, Rt Hon David


Browning, Mrs Angela
Hogg, Rt Hon Douglas


Bruce, Ian (S Dorset)
Horam, John


Burns, Simon
Howard, Rt Hon Michael


Cash, William
Howarth, Gerald (Aldershot)


Clappison, James
Jack, Rt Hon Michael


Clark, Rt Hon Alan (Kensington)
Jackson, Robert (Wantage)


Clark, Dr Michael (Rayleigh)
Jenkin, Bernard


Clifton-Brown, Geoffrey
Johnson Smith,


Collins, Tim
Rt Hon Sir Geoffrey


Cormack, Sir Patrick
Key, Robert


Cran, James
King, Rt Hon Tom (Bridgwater)


Davies, Quentin (Grantham)
Kirkbride, Miss Julie


Davis, Rt Hon David (Haltemprice)
Laing, Mrs Eleanor


& Howden)
Lait, Mrs Jacqui


Day, Stephen
Lansley, Andrew


Donaldson, Jeffrey
Leigh, Edward


Duncan, Alan
Letwin, Oliver


Duncan Smith, Iain
Lewis, Dr Julian (New Forest E)


Emery, Rt Hon Sir Peter
Lilley, Rt Hon Peter


Fabricant, Michael
Lloyd, Rt Hon Sir Peter (Fareham)


Fallon, Michael
Lyell, Rt Hon Sir Nicholas


Flight, Howard
MacGregor, Rt Hon John


Forsythe, Clifford
McIntosh, Miss Anne


Forth, Rt Hon Eric
MacKay, Rt Hon Andrew


Fox, Dr Liam
Maclean, Rt Hon David


Fraser, Christopher
McLoughlin, Patrick


Gale, Roger
Major, Rt Hon John


Garnier, Edward
Mates, Michael


Gibb, Nick
Maude, Rt Hon Francis





Mawhinney, Rt Hon Sir Brian
Streeter, Gary


May, Mrs Theresa
Swayne, Desmond


Moss, Malcolm
Syms, Robert


Nicholls, Patrick
Tapsell, Sir Peter


Norman, Archie
Taylor, John M (Solihull)


Ottaway, Richard
Taylor, Sir Teddy


Paice, James
Thompson, William


Paterson, Owen
Tredinnick, David


Pickles, Eric
Trend, Michael


Prior, David
Trimble, Rt Hon David


Randall, John
Viggers, Peter


Redwood, Rt Hon John
Walter, Robert


Robertson, Laurence (Tewk'b'ry)
Wardle, Charles


Roe, Mrs Marion (Broxbourne)
Waterson, Nigel


Ross, William (E Lond'y)
Whitney, Sir Raymond


Ruffley, David
Whittingdale, John


St Aubyn, Nick
Widdecombe, Rt Hon Miss Ann


Sayeed, Jonathan
Willetts, David


Shephard, Rt Hon Mrs Gillian
Winterton, Mrs Ann (Congleton)


Shepherd, Richard
Winterton, Nicholas (Macclesfield)


Simpson, Keith (Mid-Norfolk)
Woodward, Shaun


Smyth, Rev Martin (Belfast S)
Yeo, Tim


Soames, Nicholas
Young, Rt Hon Sir George


Spicer, Sir Michael
Tellers for the Ayes:


Spring, Richard
Sir David Madel and


Stanley, Rt Hon Sir John
Mrs. Caroline Spelman.




NOES


Adams, Mrs Irene (Paisley N)
Chapman, Ben (Wirral S)


Ainsworth, Robert (Cov'try NE)
Chaytor, David


Allan, Richard
Chidgey, David


Allen, Graham
Clapham, Michael


Anderson, Donald (Swansea E)
Clark, Rt Hon Dr David (S Shields)


Armstrong, Rt Hon Ms Hilary
Clark, Paul (Gillingham)


Ashdown, Rt Hon Paddy
Clarke, Eric (Midlothian)


Ashton, Joe
Clarke, Rt Hon Tom (Coatbridge)


Atkins, Charlotte
Clarke, Tony (Northampton S)


Austin, John
Clelland, David


Ballard, Jackie
Cohen, Harry


Barnes, Harry
Coleman, Iain


Beard, Nigel
Connarty, Michael


Begg, Miss Anne
Cooper, Yvette


Bell, Stuart (Middlesbrough)
Corbett, Robin


Bennett, Andrew F
Corbyn, Jeremy


Benton, Joe
Corston, Ms Jean


Bermingham, Gerald
Cotter, Brian


Best, Harold
Cousins, Jim


Betts, Clive
Crausby, David


Blackman, Liz
Cryer, John (Hornchurch)


Blears, Ms Hazel
Cummings, John


Blizzard, Bob
Cunningham, Jim (Cov'try S)


Boateng, Paul
Curtis-Thomas, Mrs Claire


Borrow, David
Dalyell, Tam


Bradley, Keith (Withington)
Darvill, Keith


Bradley, Peter (The Wrekin)
Davey, Edward (Kingston)


Bradshaw, Ben
Davey, Valerie (Bristol W)


Breed, Colin
Davidson, Ian


Brinton, Mrs Helen
Davies, Rt Hon Denzil (Llanelli)


Buck, Ms Karen
Davies, Geraint (Croydon C)


Burgon, Colin
Dawson, Hilton


Burnett, John
Dean, Mrs Janet


Butler, Mrs Christine
Dismore, Andrew


Cable, Dr Vincent
Dobbin, Jim


Caborn, Rt Hon Richard
Dobson, Rt Hon Frank


Campbell, Alan (Tynemouth)
Donohoe, Brian H


Campbell, Mrs Anne (C'bridge)
Doran, Frank


Campbell, Rt Hon Menzies
Dowd, Jim


(NE Fife)
Drown, Ms Julia


Campbell, Ronnie (Blyth V)
Dunwoody, Mrs Gwyneth


Campbell-Savours, Dale
Eagle, Angela (Wallasey)


Cann, Jamie
Eagle, Maria (L'pool Garston)


Caplin, Ivor
Edwards, Huw


Casale, Roger
Efford, Clive


Caton, Martin
Ennis, Jeff


Cawsey, Ian
Fearn, Ronnie






Fitzsimons, Lorna
Levitt, Tom


Foster, Rt Hon Derek
Lewis, Ivan (Bury S)


Foster, Michael Jabez (Hastings)
Lewis, Terry (Worsley)


Foulkes, George
Linton, Martin


Galloway, George
Livingstone, Ken


Gapes, Mike
Llwyd, Elfyn


Gardiner, Barry
Lock, David


George, Bruce (Walsall S)
Love, Andrew


Gerrard, Neil
McAvoy, Thomas


Gibson, Dr Ian
McDonagh, Siobhain


Gilroy, Mrs Linda
McDonnell, John


Godsiff, Roger
McFall, John


Goggins, Paul
McIsaac, Shona


Golding, Mrs Llin
McKenna, Mrs Rosemary


Gordon, Mrs Eileen
Mackinlay, Andrew


Griffiths, Nigel (Edinburgh S)
MacShane, Denis


Griffiths, Win (Bridgend)
Mactaggart, Fiona


Grocott, Bruce
McWalter, Tony


Gunnell, John
Mahon, Mrs Alice


Hall, Mike (Weaver Vale)
Mallaber, Judy


Hall, Patrick (Bedford)
Mandelson, Rt Hon Peter


Harris, Dr Evan
Marsden, Gordon (Blackpool S)


Harvey, Nick
Marsden, Paul (Shrewsbury)


Heal, Mrs Sylvia
Marshall, David (Shettleston)


Healey, John
Marshall-Andrews, Robert


Heath, David (Somerton & Frome)
Martlew, Eric


Henderson, Doug (Newcastle N)
Maxton, John


Henderson, Ivan (Harwich)
Meacher, Rt Hon Michael


Hepburn, Stephen
Meale, Alan


Heppell, John
Merron, Gillian


Hesford, Stephen
Michie, Bill (Shef'ld Heeley)


Hewitt, Ms Patricia
Milburn, Rt Hon Alan


Hill, Keith
Miller, Andrew


Hinchliffe, David
Moffatt, Laura


Hodge, Ms Margaret
Moonie, Dr Lewis


Hood, Jimmy
Moran, Ms Margaret


Hoon, Geoffrey
Morris, Ms Estelle (B'ham Yardley)


Hope, Phil
Mountford, Kali


Hopkins, Kelvin
Mowlam, Rt Hon Marjorie


Howarth, George (Knowsley N)
Mudie, George


Howells, Dr Kim
Mullin, Chris


Hoyle, Lindsay
Murphy, Denis (Wansbeck)


Hughes, Kevin (Doncaster N)
Murphy, Rt Hon Paul (Torfaen)


Humble, Mrs Joan
Naysmith, Dr Doug


Hurst, Alan
Oaten, Mark


Hutton, John
O'Brien, Bill (Normanton)


Iddon, Dr Brian
O'Brien, Mike (N Warks)


Illsley, Eric
O'Neill, Martin


Ingram, Rt Hon Adam
Öpik, Lembit


Jackson, Ms Glenda (Hampstead)
Palmer, Dr Nick


Jackson, Helen (Hillsborough)
Pearson, Ian


Jenkins, Brian
Pendry, Tom


Johnson, Alan (Hull W & Hessle)
Perham, Ms Linda


Johnson, Miss Melanie
Pickthall, Colin


(Welwyn Hatfield)
Pike, Peter L


Jones, Barry (Alyn & Deeside)
Plaskitt, James


Jones, Helen (Warrington N)
Pollard, Kerry


Jones, Dr Lynne (Selly Oak)
Pound, Stephen


Jones, Martyn (Clwyd S)
Powell, Sir Raymond


Keen, Alan (Feltham & Heston)
Prentice, Ms Bridget (Lewisham E)


Keen, Ann (Brentford & Isleworth)
Prentice, Gordon (Pendle)


Keetch, Paul
Prescott, Rt Hon John


Kelly, Ms Ruth
Primarolo, Dawn


Kemp, Fraser
Purchase, Ken


Kennedy, Jane (Wavertree)
Quinn, Lawrie


Kidney, David
Radice, Giles


Kilfoyle, Peter
Reed, Andrew (Loughborough)


King, Andy (Rugby & Kenilworth)
Reid, Rt Hon Dr John (Hamilton N)


King, Ms Oona (Bethnal Green)
Rendel, David


Kirkwood, Archy
Roche, Mrs Barbara


Kumar, Dr Ashok
Ross, Ernie (Dundee W)


Ladyman, Dr Stephen
Rowlands, Ted


Lawrence, Ms Jackie
Roy, Frank


Laxton, Bob
Ruddock, Joan


Lepper, David
Russell, Bob (Colchester)


Leslie, Christopher
Ryan, Ms Joan





Salter, Martin
Tonge, Dr Jenny


Sarwar, Mohammad
Trickett, Jon


Savidge, Malcolm
Turner, Dennis (Wolverh'ton SE)


Sedgemore, Brian
Turner, Dr Desmond (Kemptown)


Shaw, Jonathan
Turner, Dr George (NW Norfolk)


Shipley, Ms Debra
Twigg, Derek (Halton)


Simpson, Alan (Nottingham S)
Twigg, Stephen (Enfield)


Singh, Marsha
Tyler, Paul


Smith, Rt Hon Andrew (Oxford E)
Vaz, Keith


Smith, Angela (Basildon)
Walley, Ms Joan


Smith, Jacqui (Redditch)
Ward, Ms Claire


Soley, Clive
Wareing, Robert N


Spellar, John
Webb, Steve


Squire, Ms Rachel
Whitehead, Dr Alan


Steinberg, Gerry
Wicks, Malcolm


Stevenson, George
Williams, Rt Hon Alan


Stott, Roger
(Swansea W)


Stringer, Graham
Williams, Alan W (E Carmarthen)


Stuart, Ms Gisela
Williams, Mrs Betty (Conwy)


Stunell, Andrew
Willis, Phil


Sutcliffe, Gerry
Wills, Michael


Taylor, Rt Hon Mrs Ann
Winnick, David


(Dewsbury)
Wise, Audrey


Taylor, Ms Dan (Stockton S)
Wood, Mike


Taylor, Matthew (Truro)
Wright, Anthony D (Gt Yarmouth)


Temple-Morris, Peter



Thomas, Gareth (Clwyd W)
Tellers for the Noes:


Thomas, Gareth R (Harrow W)
Mr. Greg Pope and


Tipping, Paddy
Mr. David Jamieson.

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

The Committee divided: Ayes 300, Noes 132.

Division No. 155]
[7.18 pm


AYES


Adams, Mrs Irene (Paisley N)
Cable, Dr Vincent


Ainsworth, Robert (Cov'try NE)
Caborn, Rt Hon Richard


Allan, Richard
Campbell, Alan (Tynemouth)


Allen, Graham
Campbell, Mrs Anne (C'bridge)


Anderson, Donald (Swansea E)
Campbell, Rt Hon Menzies


Armstrong, Rt Hon Ms Hilary
(NE Fife)


Ashdown, Rt Hon Paddy
Campbell, Ronnie (Blyth V)


Ashton, Joe
Campbell-Savours, Dale


Atkins, Charlotte
Cann, Jamie


Austin, John
Caplin, Ivor


Ballard, Jackie
Casale, Roger


Barnes, Harry
Caton, Martin


Battle, John
Cawsey, Ian


Beard, Nigel
Chapman, Ben (Wirral S)


Begg, Miss Anne
Chaytor, David


Bell, Stuart (Middlesbrough)
Chidgey, David


Benn, Rt Hon Tony
Clapham, Michael


Bennett, Andrew F
Clark, Rt Hon Dr David (S Shields)


Benton, Joe
Clark, Paul (Gillingham)


Bermingham, Gerald
Clarke, Eric (Midlothian)


Best, Harold
Clarke, Rt Hon Tom (Coatbridge)


Betts, Clive
Clarke, Tony (Northampton S)


Blackman, Liz
Clelland, David


Blears, Ms Hazel
Cohen, Harry


Blizzard, Bob
Coleman, Iain


Boateng, Paul
Connarty, Michael


Borrow, David
Cooper, Yvette


Bradley, Keith (Withington)
Corbett, Robin


Bradley, Peter (The Wrekin)
Corbyn, Jeremy


Bradshaw, Ben
Corston, Ms Jean


Breed, Colin
Cotter, Brian


Brinton, Mrs Helen
Cousins, Jim


Buck, Ms Karen
Crausby, David


Burgon, Colin
Cryer, John (Hornchurch)


Burnett, John
Cummings, John


Butler, Mrs Christine
Cunningham, Jim (Cov'try S)






Curtis-Thomas, Mrs Claire
Johnson, Alan (Hull W & Hessle)


Dalyell, Tam
Johnson, Miss Melanie


Darvill, Keith
(Welwyn Hatfield)


Davey, Edward (Kingston)
Jones, Barry (Alyn & Deeside)


Davey, Valerie (Bristol W)
Jones, Helen (Warrington N)


Davidson, Ian
Jones, Dr Lynne (Selly Oak)


Davies, Rt Hon Denzil (Llanelli)
Jones, Martyn (Clwyd S)


Davies, Geraint (Croydon C)
Keen, Alan (Feltham & Heston)


Dawson, Hilton
Keen, Ann (Brentford & Isleworth)


Dean, Mrs Janet
Keetch, Paul


Dismore, Andrew
Kelly, Ms Ruth


Dobbin, Jim
Kemp, Fraser


Dobson, Rt Hon Frank
Kennedy, Jane (Wavertree)


Donohoe, Brian H
Kidney, David


Doran, Frank
Kilfoyle, Peter


Dowd, Jim
King, Andy (Rugby & Kenilworth)


Drown, Ms Julia
King, Ms Oona (Bethnal Green)


Dunwoody, Mrs Gwyneth
Kirkwood, Archy


Eagle, Angela (Wallasey)
Kumar, Dr Ashok


Eagle, Maria (L'pool Garston)
Ladyman, Dr Stephen


Edwards, Huw
Lawrence, Ms Jackie


Efford, Clive
Laxton, Bob


Ennis, Jeff
Lepper, David


Fearn, Ronnie
Leslie, Christopher


Fitzsimons, Lorna
Levitt, Tom


Foster, Rt Hon Derek
Lewis, Ivan (Bury S)


Foster, Michael Jabez (Hastings)
Lewis, Terry (Worsley)


Foulkes, George
Linton, Martin


Galloway, George
Livingstone, Ken


Gapes, Mike
Lloyd, Tony (Manchester C)


Gardiner, Barry
Llwyd, Elfyn


George, Bruce (Walsall S)
Lock, David


Gerrard, Neil
Love, Andrew


Gibson, Dr Ian
McAvoy, Thomas


Gilroy, Mrs Linda
McDonagh, Siobhain


Godsiff, Roger
McDonnell, John


Goggins, Paul
McFall, John


Golding, Mrs Llin
McIsaac, Shona


Gordon, Mrs Eileen
McKenna, Mrs Rosemary


Griffiths, Nigel (Edinburgh S)
Mackinlay, Andrew


Griffiths, Win (Bridgend)
MacShane, Denis


Grocott, Bruce
Mactaggart, Fiona


Gunnell, John
McWalter, Tony


Hall, Mike (Weaver Vale)
Mahon, Mrs Alice


Hall, Patrick (Bedford)
Mallaber, Judy


Harris, Dr Evan
Mandelson, Rt Hon Peter


Harvey, Nick
Marsden, Gordon (Blackpool S)


Heal, Mrs Sylvia
Marsden, Paul (Shrewsbury)


Healey, John
Marshall, David (Shettleston)


Heath, David (Somerton & Frome)
Marshall-Andrews, Robert


Henderson, Doug (Newcastle N)
Martlew, Eric


Henderson, Ivan (Harwich)
Maxton, John


Hepburn, Stephen
Meacher, Rt Hon Michael


Heppell, John
Meale, Alan


Hesford, Stephen
Merron, Gillian


Hewitt, Ms Patricia
Michie, Bill (Shef'ld Heeley)


Hill, Keith
Milburn, Rt Hon Alan


Hinchliffe, David
Miller, Andrew


Hodge, Ms Margaret
Moffatt, Laura


Hood, Jimmy
Moonie, Dr Lewis


Hoon, Geoffrey
Moran, Ms Margaret


Hope, Phil
Morris, Ms Estelle (B'ham Yardley)


Hopkins, Kelvin
Mountford, Kali


Howarth, George (Knowsley N)
Mowlam, Rt Hon Marjorie


Howells, Dr Kim
Mudie, George


Hoyle, Lindsay
Mullin, Chris


Hughes, Kevin (Doncaster N)
Murphy, Denis (Wansbeck)


Humble, Mrs Joan
Murphy, Rt Hon Paul (Torfaen)


Hurst, Alan
Naysmith, Dr Doug


Hutton, John
Oaten, Mark


Iddon, Dr Brian
O'Brien, Bill (Normanton)


Illsley, Eric
O'Brien, Mike (N Warks)


Ingram, Rt Hon Adam
O'Neill, Martin


Jackson, Ms Glenda (Hampstead)
Öpik, Lembit


Jackson, Helen (Hillsborough)
Palmer, Dr Nick


Jenkins, Brian
Pearson, Ian





Pendry, Tom
Stott, Roger


Perham, Ms Linda
Stringer, Graham


Pickthall, Colin
Stuart, Ms Gisela


Pike, Peter L
Stunell, Andrew


Plaskitt, James
Sutcliffe, Gerry


Pollard, Kerry
Taylor, Rt Hon Mrs Ann


Pound, Stephen
(Dewsbury)


Powell, Sir Raymond
Taylor, Ms Dari (Stockton S)


Prentice, Ms Bridget (Lewisham E)
Taylor, Matthew (Truro)


Prentice, Gordon (Pendle)
Temple-Morris, Peter


Prescott, Rt Hon John
Thomas, Gareth (Clwyd W)


Primarolo, Dawn
Thomas, Gareth R (Harrow W)


Purchase, Ken
Tipping, Paddy


Quinn, Lawrie
Tonge, Dr Jenny


Radice, Giles
Trickett, Jon


Reed, Andrew (Loughborough)
Turner, Dennis (Wolverh'ton SE)


Reid, Rt Hon Dr John (Hamilton N)
Turner, Dr Desmond (Kemptown)


Rendel, David
Turner, Dr George (NW Norfolk)


Roche, Mrs Barbara
Twigg, Derek (Halton)


Ross, Ernie (Dundee W)
Twigg, Stephen (Enfield)


Rowlands, Ted
Tyler, Paul


Roy, Frank
Vaz, Keith


Ruddock, Joan
Walley, Ms Joan


Russell, Bob (Colchester)
Ward, Ms Claire


Ryan, Ms Joan
Wareing, Robert N


Salter, Martin
Webb, Steve


Sarwar, Mohammad
Whitehead, Dr Alan


Savidge, Malcolm
Wicks, Malcolm


Sedgemore, Brian
Williams, Rt Hon Alan


Shaw, Jonathan
(Swansea W)


Sheldon, Rt Hon Robert
Williams, Alan W (E Carmarthen)


Shipley, Ms Debra
Williams, Mrs Betty (Conwy)


Simpson, Alan (Nottingham S)
Willis, Phil


Singh, Marsha
Wills, Michael


Smith, Rt Hon Andrew (Oxford E)
Winnick, David


Smith, Angela (Basildon)
Wise, Audrey


Smith, Jacqui (Redditch)
Wood, Mike


Soley, Clive
Wright, Anthony D (Gt Yarmouth)


Spellar, John



Squire, Ms Rachel
Tellers for the Ayes:


Steinberg, Gerry
Mr. Greg Pope and


Stevenson, George
Mr. David Jamieson.




NOES


Ainsworth, Peter (E Surrey)
Emery, Rt Hon Sir Peter


Amess, David
Fabricant, Michael


Ancram, Rt Hon Michael
Fallon, Michael


Arbuthnot, Rt Hon James
Flight, Howard


Atkinson, Peter (Hexham)
Forsythe, Clifford


Baldry, Tony
Forth, Rt Hon Eric


Beggs, Roy
Fox, Dr Liam


Bercow, John
Fraser, Christopher


Beresford, Sir Paul
Gale, Roger


Boswell, Tim
Garnier, Edward


Bottomley, Rt Hon Mrs Virginia
Gibb, Nick


Brady, Graham
Gill, Christopher


Brazier, Julian
Gorman, Mrs Teresa


Brooke, Rt Hon Peter
Gray, James


Browning, Mrs Angela
Green, Damian


Bruce, Ian (S Dorset)
Greenway, John


Burns, Simon
Grieve, Dominic


Cash, William
Gummer, Rt Hon John


Clappison, James
Hamilton, Rt Hon Sir Archie


Clark, Rt Hon Alan (Kensington)
Hammond, Philip


Clark, Dr Michael (Rayleigh)
Hawkins, Nick


Clifton-Brown, Geoffrey
Hayes, John


Collins, Tim
Heald, Oliver


Cormack, Sir Patrick
Heathcoat-Amory, Rt Hon David


Cran, James
Hogg, Rt Hon Douglas


Davies, Quentin (Grantham)
Horam, John


Davis, Rt Hon David (Haltemprice
Howard, Rt Hon Michael


& Howden)
Howarth, Gerald (Aldershot)


Day, Stephen
Jack, Rt Hon Michael


Donaldson, Jeffrey
Jackson, Robert (Wantage)


Duncan, Alan



Duncan Smith, Iain







Jenkin, Bernard
Ruffley, David


Johnson Smith,
St Aubyn, Nick


Rt Hon Sir Geoffrey
Sayeed, Jonathan


Key, Robert
Shephard, Rt Hon Mrs Gillian


King, Rt Hon Tom (Bridgwater)
Shepherd, Richard


Kirkbride, Miss Julie
Simpson, Keith (Mid-Norfolk)


Laing, Mrs Eleanor
Smyth, Rev Martin (Belfast S)


Lait, Mrs Jacqui
Soames, Nicholas


Lansley, Andrew
Spicer, Sir Michael


Leigh, Edward
Spring, Richard


Letwin, Oliver
Stanley, Rt Hon Sir John


Lewis, Dr Julian (New Forest E)
Streeter, Gary


Lilley, Rt Hon Peter
Swayne, Desmond


Lloyd, Rt Hon Sir Peter (Fareham)
Syms, Robert


Lyell, Rt Hon Sir Nicholas
Tapsell, Sir Peter


MacGregor, Rt Hon John
Taylor, John M (Solihull)


McIntosh, Miss Anne
Taylor, Sir Teddy


MacKay, Rt Hon Andrew
Thompson, William


Maclean, Rt Hon David
Tredinnick, David


McLoughlin, Patrick
Trend, Michael


Major, Rt Hon John
Trimble, Rt Hon David


Mates, Michael
Viggers, Peter


Maude, Rt Hon Francis
Walter, Robert


Mawhinney, Rt Hon Sir Brian
Wardle, Charles


May, Mrs Theresa
Waterson, Nigel


Moss, Malcolm
Whitney, Sir Raymond


Nicholls, Patrick
Whittingdale, John


Norman, Archie
Widdecombe, Rt Hon Miss Ann


Ottaway, Richard
Willetts, David


Paice, James
Winterton, Mrs Ann (Congleton)


Paterson, Owen
Winterton, Nicholas (Macclesfield)


Pickles, Eric
Woodward, Shaun


Prior, David
Yeo, Tim


Randall, John
Young, Rt Hon Sir George


Redwood, Rt Hon John



Robertson, Laurence (Tewk'b'ry)
Tellers for the Noes:


Roe, Mrs Marion (Broxbourne)
Sir David Madel and


Ross, William (E Lond'y)
Mrs. Caroline Spelman.

Question accordingly agreed to.

Clause 28 ordered to stand part of the Bill.

Clause 99

STAMP DUTY ON CONVEYANCE OR TRANSFER ON SALE

Mr. John Whittingdale: I beg to move amendment No. 3, in clause 99, page 71, line 5, at end insert—
'(4A) This section shall not apply to properties which are subject to uniform business rate'.
The context of the amendment is the increase in the rate of stamp duty from 2 to 2.5 per cent. on transactions valued at between £250,000 and £500,000, and from 3 to 3.5 per cent. on transactions valued at more than £500,000. Since the Labour Government came to power, there have been three tax-raising Budgets, and in each of those Budgets one of the taxes that has been increased is stamp duty.
In his first Budget, the Chancellor raised stamp duty by 50 per cent., from 1 to 1.5 per cent., on property sales valued at more than £250,000, and by 100 per cent., to 2 per cent., on property sales valued at more than £500,000. On that occasion, he tried to justify the increases by claiming that the measure was necessary to reduce volatility in the housing market. The reason he gave in his Budget speech was:
I will not allow house prices to get out of control and put at risk the sustainability of the recovery. I have therefore decided that it is right to take…. measures aimed at stability in the housing market."— [Official Report, 2 July 1997; Vol. 297, c. 313.]

In fact, the increases had far less to do with stability in the housing market than with increasing tax revenue.
That became clearer when the Chancellor put up stamp duty again in his second Budget. That time, it went up to 2 per cent. on transactions over £250,000 and to 3 per cent. on sales of more than £500,000. There was no mention in his Budget speech of the importance of stability in the housing market; the right hon. Gentleman said only that 98 per cent. of house transactions would be unaffected by the increases. In this year's Budget, the Chancellor has raised the rates for a third time, to 2.5 per cent. on sales over £250,000 and to 3.5 per cent. on sales over £500,000. However, his only attempt to justify the increase in his Budget speech was to say that 96 per cent., rather than the previous 98 per cent., of home sales would be unaffected. The effect of those three Labour Budgets taken together is clear: on transactions of more than £250,000, there has been a tax increase of 150 per cent. and on transactions of more than £500,000, there has been a tax increase of 250 per cent. So much for the Government saying that they have no intention of putting up taxes.
There is a strong suspicion that this year's will not be the last increase, for in the rest of Europe stamp duty or its equivalent is payable at much higher rates.

Mr. Campbell-Savours: Quite right.

Mr. Whittingdale: I am grateful to the hon. Gentleman for confirming that. I understand that the average rate that now applies in Europe is now about 7 per cent., whereas in France, on certain classes of property, it is as high as 18 per cent. Many people believe that the Chancellor is trying to harmonise by stealth. There have been reports that he wanted to put up the rate of stamp duty in this year's Budget by a full 1 per cent., instead of only 0.5 per cent., but that he was dissuaded at the last minute by those who said that it would be too great a blow at one time. There is now a widespread belief that each future Budget will introduce further increases and that the Chancellor has now indicated to our European partners that he intends to increase the rates steadily until they reach the rates of our competitors.

Mr. Clifton-Brown: Is my hon. Friend aware that France recently cut its transaction costs from 18.5 per cent. to 4.5 per cent., because it felt that it was so out of line with the rest of its European partners? Would it not be folly if the UK Government were to increase stamp duty any further, given that we already have the highest property taxation of any country in the European Union?

Mr. Whittingdale: I am grateful to my hon. Friend for that intervention, because I had not known that. It may indeed confirm that there is a general movement throughout Europe to bring rates closer together, and that there is in operation an agenda to harmonise rates of stamp duty. It is even possible that that commitment has already been given by the Chancellor to the Paymaster General, in her capacity as the chairman of the committee on the code of conduct on business taxation.
I am sorry that the Paymaster General is not in her place, but I ask the Financial Secretary to make it clear in her reply that such speculation—which is considerable—is without foundation. Despite the fact that the hon.


Member for Workington (Mr. Campbell-Savours) would like that harmonisation to happen, I suspect that few people in this country share his view and that there would be considerable alarm if the Government did intend to continue to increase stamp duty in each future Budget.

Mr. Campbell-Savours: Can the hon. Gentleman explain why it seems to him so wrong that someone who purchases a property for £500,000 should pay £15,000 to the state, when that tax is the lowest in Europe?

Mr. Whittingdale: That very point is the crux of the amendment, because, overwhelmingly, transactions over £500,000 are not conducted by people buying large houses, but by businesses, so the tax is a tax on business. The Chancellor does not like to admit that.

Mr. Derek Twigg: Can we take it from that remark that the Conservatives are not opposed to the increase in stamp duty on domestic property sales?

Mr. Whittingdale: I am sorry to disappointment the hon. Gentleman, but the Opposition are completely opposed to that tax increase, because it is a stealth tax increase which is especially damaging to business. Our amendment is designed to highlight that damage.

Mr. Twigg: I do not want to pre-empt the hon. Gentleman's remarks and I apologise if I am doing so, but I want to be clear. Will Conservative Members be voting against the measure?

Mr. Whittingdale: I am happy to confirm that we shall vote in favour of our amendment and against clause stand part.
As I said, when the Chancellor ever mentions the increases, he speaks of them in terms of house sales. Like the hon. Member for Workington, the right hon. Gentleman has tried to give the impression that the tax affects only those who can afford to buy expensive houses. It is worth pointing out that, in many parts of the south-east, £250,000 will not buy an especially large house. Many of those who will have to pay the increases are not fat cats, but, in the main, families who aspire to move to a larger house. Indeed, I am hoping to move house in the near future—

Mr. Love: Declare an interest!

Mr. Whittingdale: That is exactly what I was just doing. If I do move, it is possible that, like a large number of my constituents, I shall be affected by the increases.

Mr. Leslie: Half a million?

Mr. Whittingdale: I should like to point out to the hon. Gentleman that the clause increases the rate of stamp duty on all transactions of more than £250,000. In my constituency, £250,000 does not buy a mansion; it buys a reasonably sized property of the sort in which I suspect the majority of my constituents aspire to live one day.

Mr. Love: Is the hon. Gentleman saying that the majority of his constituents would fall within the category of those buying houses valued in excess of £250,000,

despite the fact that, earlier in his speech, he confirmed that my right hon. Friend the Chancellor has said that between 4 and 6 per cent. of house purchases are affected by the increases?

Mr. Whittingdale: I said that the majority of my constituents would aspire to live in such houses. In the area that I represent—and certainly in the areas represented by several of my hon. Friends—the proportion of transactions over that threshold would be considerably in excess of 4 per cent.
There is another equally important point about the way in which the increases will affect people involved in home purchases. Many house sales involve the purchase of new houses—

The Temporary Chairman (Mr. John Butterfill): Order. The hon. Gentleman is straying from the amendment. I am sure that he will wish to address those issues in the clause stand part debate, but I hope that, for the time being, he will confine his attention to the amendment under discussion.

Mr. Whittingdale: I am grateful for your guidance, Mr. Butterfill. I will certainly concentrate on the amendment before us. I was tempted to divert slightly.
However much the Chancellor may pretend otherwise, stamp duty is not payable only on house purchases; it is payable on all transactions that require the transfer of a document. That includes sales and leases of commercial property, goodwill, book debts and intellectual property, such as patents and trademarks. When we debated the Budget initially, I was grateful to the hon. Member for Cambridge (Mrs. Campbell) for highlighting the effect of the increases on the high-technology firms in her constituency that will be severely affected by the rising cost of the transfer of intellectual property in which they specialise.
According to the Government's figures, of all transactions over £250,000, 65 per cent. of the receipts from stamp duty come from commercial property and land transactions. For transactions over £500,000, 80 per cent. of receipts come from commercial property and land transactions. As I said earlier, this is overwhelmingly a business tax and businesses will have to pay the majority of the extra £270 million that the increases will raise.
In his Budget speech, the Chancellor made much of the fact that our future depends on enterprise. However, in practice, he is clobbering enterprise through increased taxation. Last year, several organisations representing the commercial property industry commissioned independent research by Arthur Andersen and the London business school on the impact of increased stamp duty rates on the commercial property sector. That research showed that commercial property is a hugely important component of our economy and contributes about 10 per cent. of our gross domestic product. It is valued at about £500 billion in the private sector and a further £110 billion in the public sector.
Moreover, the analysis also revealed that there is a multiplier effect and that changes in the level of stamp duty have a disproportionate impact on commercial property prices. As a result, it is estimated that a 1 per cent. increase in stamp duty will wipe £25.6 billion from


the capital value of commercial property. If a real rate of growth in rents of 2.5 per cent. is assumed, the figure increases to a —43 billion decline in the total value.
That is particularly serious as many industrial and commercial companies use the value of their commercial property assets as collateral for debt finance. It is difficult to estimate the precise value of the total amount of loans secured on commercial property assets, but research suggests that it is something like 50 per cent. Therefore, a significant drop in commercial property values is likely to have a measurable effect on the ability of firms to raise loan finance. That may be particularly significant for small and medium-sized enterprises.

Mr. Campbell-Savours: Does it not mean also that the tax will cut into the spiralling commercial rents that are the subject of many protests to Members of Parliament from small shopkeepers throughout the country who simply cannot afford to pay rents in the commercial sector? Therefore, the tax is extremely helpful in that sense.

Mr. Whittingdale: I am interested to see the hon. Gentleman defending these increases—but perhaps it fits in with his earlier suggestion that the rates should continue to increase in future Budgets. Perhaps the Minister will confirm whether she also believes that it is desirable to tax the commercial property sector even more. However, the Government have not offered that justification so far.

Mr. Shaun Woodward: The hon. Member for Workington (Mr. Campbell-Savours) would like to see lower property rents, but the measure will have completely the opposite effect. The cost will force rents up because, effectively, it is an additional tax on those rents.

Mr. Whittingdale: My hon. Friend is right: stamp duty is payable on leases as well as on sales, and therefore it will have the effect of increasing costs. There will also be a corresponding effect, to which I have referred, on the overall value of commercial property. I fear that it would take a great deal of economic research by experts considerably more knowledgeable than me to work out the overall impact of the changes. However, I am sure that it could be modelled, and it would be interesting to conduct such an analysis.
In talking about the research by professional economists into the impact of these changes, it is worth drawing the Committee's attention to the Arthur Andersen report's conclusion that the public sector will be a net financial loser from a stamp duty increase. The public sector holds a large property portfolio—I said earlier that the total value of commercial property owned by the public sector is £110 billion—and it is estimated that it will suffer a capital loss of between £5 billion and £11 billion as a result of a 1 per cent. rise in stamp duty. That capital loss vastly exceeds the additional revenue. If one applies a reasonable discount rate to the future stream of revenue that will result from increasing stamp duty and

compares that with the reduction in the overall value, one can see that there is a substantial net loss to the public sector.

Mr. Leslie: The hon. Gentleman has surely calculated the effect on Exchequer yields if his amendment were to be carried. What would the cost be?

Mr. Whittingdale: I am not sure of the exact revenue implications because there was some dispute about that figure when we debated a similar amendment to last year's Finance Bill. I shall be interested to hear the Minister's view. However, for the reasons that I have given, I suspect that the cost might be rather less than some would suggest.
Other important aspects of this tax show why it is so damaging. We have raised these matters in previous debates about stamp duty. Stamp duty operates according to what is known colloquially as a "slab" system rather than a "slice" system. That means that, if a transaction is valued at just £1 over the threshold of £250,000 or £500,000, the higher rate of stamp duty will apply not just to the amount above the threshold but to the entire value of the transaction.

Mr. Campbell-Savours: That is good.

Mr. Whittingdale: The hon. Gentleman said that that is good, but it creates potential marginal rates of taxation of 3,750 per cent., which is patently absurd. The consequence of operating the system in that way is that many purchasers will seek to avoid incurring the higher rate by paying a reduced amount on the value of the property while agreeing an artificial price for items such as fixtures and fittings, thereby ensuring that the headline price that is paid is below the threshold, whereas the total amount that they are handing over is above it. That applies equally to businesses and to residential sales. There is considerable incentive to make such arrangements to avoid extra cost. By creating the differential, the Government are encouraging the continuation of that practice.

Mr. Campbell-Savours: Is the hon. Gentleman suggesting that, to overcome that problem we should include fixtures and fittings in the price of properties?

Mr. Whittingdale: No, I am not suggesting that at all. We should not have introduced those thresholds and we should not be increasing the rates, but one method of dealing with that problem would be to change the way in which stamp duty is levied from a slab system to a slice system. We made that suggestion in the debates on last year's Finance Bill, and in his reply, the then Paymaster General, the hon. Member for Coventry, North-West (Mr. Robinson), said that he could see the attractions of slicing rather than slabbing and that he was happy to consider our suggestion. Although we do not regret his passing from the Government, it would be a pity if his acceptance of that point was also lost. I am disappointed that the Government have made no attempt to correct the distortion that the system creates.

Mr. Gerald Bermingham: I have been listening with interest to the hon. Gentleman's remarks. I first qualified as a solicitor in 1967—I declare


an interest as an ex-solicitor—and became a barrister in 1985. When I ran a large firm of solicitors, it was common practice in property sales to avoid the stamp duty margin simply by valuing fixtures and fittings that went with the sale. In the domestic system, that applied to curtains and carpets, and in the commercial system, it was power lines and fixtures for shop processes. The hon. Gentleman's point is a nonsense. No one has ever thought of having a slice system; we have always agreed on a slab system, but we have always been careful to advise our clients how to achieve the correct slab. Why did not the Conservative Government do anything about the system in all their years in power?

The Temporary Chairman: Order. The hon. Gentleman's intervention is too long.

Mr. Whittingdale: As I was explaining at the beginning of my remarks—I am sorry that the hon. Gentleman was not present—this Government have made the problem far worse by introducing three successive, huge increases in stamp duty in three Labour Budgets. That has increased the incentive for people to seek to avoid the tax in the ways that I have described.
Furthermore, it would be sensible to consider levying the duty by a different method not only because of the point about fixtures and fittings but because it is a very strange tax. One has to pay a huge amount extra just because the price of the transaction goes over the threshold. As I said earlier, that produces ridiculous marginal rates of taxation.

Mr. Derek Twigg: If, as you say, there is a problem for householders and not only for purchasers of commercial property, and if, by some miracle, your amendment were accepted, would you vote for clause 99—

The Temporary Chairman: Order. It is not my amendment.

Mr. Twigg: I apologise, Mr. Butterfill. Would the hon. Gentleman then vote for clause 99?

Mr. Whittingdale: I have already said to the hon. Gentleman that Conservative Members totally oppose the increases because they will affect householders and businesses. We realise that they will be particularly damaging to businesses, and that is the subject of our amendment, but, even if our amendment were carried, and my powers of persuasion caused the Financial Secretary to accept it, I regret that we would still vote against the clause.
As I said earlier, I welcomed the fact that our arguments for changing the way in which the tax was levied had been recognised, at least in part, by the former Paymaster General, the hon. Member for Coventry, North-West. I am sorry that our case has not been recognised in the Finance Bill. Does the Financial Secretary accept that the issue at least needs to be addressed, and will she examine the possibility of making a change? That change need cost nothing. It would be possible to devise a more progressive tax, levied according to a slice system, which was also revenue neutral.
Most transactions affected by the increase are VAT exempt, but that is not true of them all. In some cases, commercial property owners may exercise what is known

as the option to tax, whereby they choose to waive their VAT exemption and charge VAT on rents or sales. That may seem a rather curious course, but it has advantages because they are then able to recover VAT on, for example, their input costs for construction. If a company pursues that course, it may well find that, in the event of a sale, it pays stamp duty not only on the sale value but on the VAT charge as well. In such cases, stamp duty is a straightforward tax on a tax. In the case of a building that costs £1 million, the VAT charge would be £175,000. The total stamp duty paid on that transaction would be over £41,000, of which over £6,000 would be double taxation.
The same problem could well arise in the transfer of going concerns. If a business is transferred as a going concern, it is an exempt supply and no VAT is payable. However, Customs and Excise no longer gives advance clearance on the application of relief, and it is left to the parties to take a view on the VAT status of any transaction. It is not always easy to define a going concern, and there are cases where VAT is not charged, but it is subsequently demonstrated that it should have been charged. In those circumstances, the purchaser not has to pay not only VAT but the extra amount of stamp duty on the VAT charge.
Given the steeply progressive nature of the stamp duty regime and the slab system that I have described, it is not impossible that the additional VAT charge could take the value of the transaction over a threshold, so that a higher rate of stamp duty becomes payable on the entire value of the transaction. In the particular cases that I have described, the additional amount of stamp duty may be greater than the duty that was originally payable. I fully accept that such an outcome is not likely to be a common occurrence, but it is certainly possible and accentuates the point that stamp duty can be extremely unfair, as it is double taxation.
Stamp duty increases are distorting the operation of the market. Under the previous Government, stamp duty was charged at a flat rate of 1 per cent., with the duty on shares set at 0.5 per cent. That 0.5 per cent. differential between the level of duty for shares and that for all other transactions was not then regarded as particularly significant, and it had little effect on behaviour.
8 pm
However, as a result of the three Budgets, the difference in the duty rates between that applicable on assets and that applicable on shares has been increased to 3 per cent. That is a significant cost, and it is likely to distort market decisions when companies choose whether to raise finance from asset sales or from the issue of shares.
That distortion will be increased even further if the Government decide to abolish stamp duty on shares. Although, as far as 1 am aware, there has been no hint that that will happen, the Minister will be very much aware of the huge concern about the effect of stamp duty on the competitiveness of the City of London.
The alliance between the London and Frankfurt stock exchanges is just the first step towards the creation of a pan-European stock exchange. The Minister knows that, in Germany, no stamp duty is payable on share transfers.


There is a real danger that business will be lost if the differential between the rate applicable in this country and that applicable abroad continues.
The issue is very serious. Those in the City regard the increase as a considerable threat. I hope that the Minister will carefully consider what help might be given to ensure that the City of London remains the greatest financial centre in the world.
The cumulative effect of all those increases will be to encourage the avoidance of duty altogether. A rate of 2.5 or 3.5 per cent. obviously makes it far more worth while to execute documents offshore, so that no duty is payable. I am aware that clause 97 attempts to address that, by increasing the penalties and interest payable if documents are stamped late. However, for most transactions, there will never be cause to bring documents back to the United Kingdom. The one time when it might be necessary would be if one of the parties wished to take legal action under the terms of the contract. However, the £300 penalty that the Bill introduces seems a relatively small price to pay, given the likelihood of that happening.
Two senior managers at KPMG, the Government's favourite accountancy firm, writing in The Tax Journal, say:
Provided that the interest rate charged on late paid stamp duty is not considered penal, it may still be attractive to leave documents off-shore and unstamped. Provided the document doesn't subsequently need to be brought onshore, the stamp duty charge is deferred permanently"—
so, by increasing duty rates to such a level, the Government are encouraging tax avoidance, and it seems to me inevitable that that practice will increase.
I have stated many reasons why I feel that the increases will be especially damaging to business. They are, of course, punitive on numerous people and I certainly would not wish them to be introduced to affect those involved in residential property transactions either. That is why I told the hon. Member for Halton (Mr. Twigg) that we would vote against clause stand part. However, I believe that the increases impact especially heavily on businesses. It is for that reason that we have tabled the amendment, the aim of which is to exempt business properties from the increase.

Mr. Leslie: Will the hon. Gentleman give way?

Mr. Whittingdale: I am just about to finish—well, all right.

Mr. Leslie: The amendment would exempt commercial businesses from stamp duty. Does the hon. Gentleman want to exempt just the increase? If he could, would he exempt businesses from all stamp duty, or perhaps just the increases above 1 per cent?

Mr. Whittingdale: The hon. Gentleman will recall, because I believe that he was present, that, last year, we moved an amendment to the Finance Bill which would have prevented the increases imposed in that Budget from affecting businesses. I can assure him that if, as we fear, the Government continue to introduce further increases in stamp duty in future Budgets, we shall oppose those, too.
I tell the Minister that, if the Government's rhetoric about wanting to help business means anything at all, they should accept the amendment.

Mr. Derek Twigg: I was very interested in the speech of the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). I pursued the line of intervention questioning that I did because I thought that the Conservative party's approach tonight was interesting. Conservative Members have decided that they want to exempt business and commercial properties from the operation of the clause, and that such properties are more important than domestic properties. They have made it all too clear that they do not really care about the domestic side of this tax.
The Conservatives say, "We want to do this because it is very important and we want to ensure that something happens," and they try to identify themselves as friends of business and commercial property; but, when they are asked what they would do if the amendment were passed, they say that they would vote against the clause anyway. That means that they would vote against the clause as amended by their amendment.

Mr. Whittingdale: Given the size of the Government's majority, I suspect that we shall not succeed in carrying the amendment or in persuading the Government that they should not proceed with the clause. If, by some chance, we had persuaded the Government to accept our amendment, exempting business, then, for the reasons that I have explained, we would still have objections to the clause. However, given the size of the Government's majority, I think that we may assume that the clause will probably be passed, and we might at least have distinctly improved it by removing from businesses the obligation to pay the increase.

Mr. Twigg: I simply gained the impression that perhaps the Conservatives had not thought this one through enough, and that, instead, they were going to waste our time by speaking and voting against clause stand part. Perhaps they were a bit stung by previous accusations that they were not going to table amendments because there might be a difference of opinion among them, given the latest state of affairs.
The debate went from the sublime to the ridiculous. I am happy to be corrected if I misheard, but I thought that the hon. Member for Maldon and East Chelmsford said that the stamp duty increases were a threat to the future of the City of London as the premier financial place in the world.

Mr. Whittingdale: I am grateful to the hon. Gentleman for giving me the chance to correct him on that point. On the issue of the future of the City of London, I was highlighting the danger—which the City believes is extremely real—that arises from the fact that, in this country, we charge 0.5 per cent. on share transactions, whereas in Germany there is no stamp duty on share transactions. Because of the technological developments that are leading to the integration of stock exchanges across Europe, there is a significant danger that business will move to where costs are lowest; in that case, it would


mean Frankfurt, not London. Therefore, to protect the City of London's position, the City believes that it is important that this issue should be addressed.

Mr. Twigg: That reply is very interesting in the context of the amendment.
There is some suggestion that the stamp duty increases will cause bankruptcies throughout the country, that businesses will collapse and that stamp duty is the single most important factor in people's considerations when setting up businesses, continuing them or buying larger premises. That is nonsense. There is no evidence to support that contention. I cannot recall from any discussions that I have had with business men in my area that they have seen stamp duty as a major problem. The hon. Member for Maldon and East Chelmsford may quote any figures that he wants, but 1 am talking about my conversations with business men and women in my constituency, and I have never found stamp duty to be a major issue. It is interesting that the Conservatives are trying to make an issue of it tonight.

Mr. Michael Jack: In the hon. Gentleman's extensive preparation on the amendment, has he had time to read the report produced by Arthur Andersen and written on its behalf by David Currie and Andrew Scott of the London business school?

Mr. Twigg: I will be open and honest: I have not—but just because Arthur Andersen says something does not mean that it is right. In fact, given some of the work that Arthur Andersen has done on information technology systems around the country, I wonder about its competence and success.

Mr. Woodward: rose—

Mr. Twigg: Let me continue. I am pleased that people find my contribution interesting.
Obviously, one may quote whatever example or avenue one wants and use it for whatever purpose one wants, but I am saying that, in my constituency, the issue has never been raised with me as a concern. Among the issues that were continually raised were the policies by which the previous Government clobbered small business, and the various policies that created a difficult economic environment. We cannot separate the issue of stamp duty from that of the general economic climate and economic stability. However, it seems to be suggested that this issue is out on a limb and is the main cause of problems.

Mr. Woodward: Even though the hon. Gentleman has not read the Arthur Andersen report, can he tell the Committee what value to a company its loans represent in terms of its borrowing money against the value of its property? I think that this information is generally known. What percentage of the outstanding loans of an average company is based on commercial property?

Mr. Twigg: I expected better than that from the hon. Gentleman. Companies have to make commercial and business decisions. The hon. Gentleman's intervention does not take us any further than the contribution of the

hon. Member for Maldon and East Chelmsford from the Opposition Front Bench. The hon. Gentleman made a nonsensical point.

Mr. Woodward: It is crucial.

Mr. Twigg: I have talked to business men in my locality and they appear not to rate this issue as one of the greatest importance. It could be that Halton is somewhat different from other areas. I do not know. However, I have talked to many small business men and it seems that the general thrust of policies—

Mr. Woodward: They do not understand.

Mr. Twigg: That is interesting. The hon. Gentleman says that business men in my constituency do not understand.

Mr. Bermingham: First, does my hon. Friend agree that there have been major suits of negligence against major accountancy firms over the past few years, thus leading most of us to accept that they do not always get things right? Secondly, as someone who, on behalf of clients or others, has bought and sold shares for the past 30 years or so, I have always paid stamp duty personally or for clients. I have never experienced an objection to stamp duty and I have not seen all the City of London business transferred to Zurich or anywhere else. My hon. Friend may just agree with me.

Mr. Twigg: My hon. Friend makes an interesting and telling point. It is clear that the Opposition decided not to deal with it. I am grateful to my hon. Friend.
We have not been told how, if the amendment were carried, the gap in the Budget would be filled. That is normally the position. The Opposition like to oppose, but they have nothing to put in the place of Government policies. Basically, they are playing games. That was made clear when the hon. Member for Maldon and East Chelmsford talked about what would happen if the amendment were agreed to. Opposition Members are in an almost incredible situation.

Mr. Gibb: Will the hon. Gentleman give way?

Mr. Twigg: I shall give way for the last time, because I am sure that the Committee would like me to make progress.

Mr. Gibb: At the general election, did the hon. Gentleman stand on a platform of no increases in taxation? Is the Government proposal not an increase in taxation?

Mr. Twigg: The hon. Gentleman is becoming rather robotic on this issue. He is not getting an answer to his question because its basis is incorrect. I am sorry that he cannot think more widely on this issue. He seems to be transfixed.
A wide range of measures are set out in the Budget, which the Government put forward to help and promote business. We have heard nothing this evening about many of them. Many measures have been welcomed by business and the Opposition have taken up the issue of stamp duty


because they think that they can have some fun with it. The fact is that, generally, business welcomes the Budget. I am confident that what the Government have set out in the Bill will be in the country's best interests.

Mr. Nick St. Aubyn: I fully support the amendment. I suggest to the hon. Member for Halton (Mr. Twigg) that there may be revenue-neutral effects from reducing the rate of duty on commercial property. The report cited by my right hon. and hon. Friends makes it clear that, such is the devastating effect of rises in stamp duty, they damage the value of commercial property owned by pension funds and other forms of saving for people throughout the country, and the value of the Government's property holdings. Based on their figures, a 0.5 per cent. increase in stamp duty reduces the value of the Government's holdings of commercial property by £2.5 billion, whereas the revenue to be raised from the increment in stamp duty will be not more than £100 million a year. In plain language, it will take the Government 25 years to recover the loss in the capital value of their stock of commercial property if they go ahead with the proposed measures.
This is not merely a mathematical exercise. We know that account has been taken of all the property holdings of Government Departments and that there is an on-going programme to rationalise Government property holdings. Properties are being sold by the Government year after year. Because of savage increases in stamp duty, there will be far less money coming in.
Through the amendment, we are protecting public finances. I draw the attention of the hon. Member for Halton to the code for fiscal stability. One of its purposes is to improve the public financial balance sheet. However, we are seeing an attack on the strength and probity of that balance sheet. At the same time, as my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) has already mentioned, increases in stamp duty, far from creating a more stable environment, create a more volatile one. That is in direct conflict with the code for fiscal stability.
According to the research that has been carried out, there is a 50 per cent. increase in the volatility of property prices as a result of the increases in stamp duty. That is a major increase. Why does it happen? If the transaction costs of buying and selling property increase, the incidence of such transactions will decrease. Where there are property transactions, there will be much greater increases in prices. That is shown clearly by research, and it stands to reason. As we have found in so many markets—securities and elsewhere—if transaction costs are reduced, the volume of transactions increases, and vice versa.
There is another reason why there may be revenue-neutral consequences that relate to tax avoidance and the use of offshore vehicles. We should not be surprised if, as a result of this latest rise in stamp duty, and if there are further rises in the pipeline, commercial property is dealt with increasingly through derivative instruments. If that route is taken, there will be no stamp duty take for the Government. Again, their revenue will decrease.
There will be an impact on business. When we talk about the cost of buying and selling property, we are always talking about a business cost. I know that we are focusing deliberately on commercial property, but business will feel the effect of the increases in stamp duty on homes. Whenever a senior and important executive in a company has moved home, the cost of that move has been radically increased by the rises in stamp duty over the past few years.
In Guildford, 7,000 of my constituents and I—I am happy to declare an interest—are directly affected by the proposed increase in stamp duty. Many of the 7,000 are senior executives. They are important people working in local firms. It is a highly competitive world and many of the businesses in my constituency are competing in Europe, the far east and America. Their local costs are a critical factor in their ability to win more business. The effect of these rises in stamp duty will be to harm their competitiveness and reduce the amount of revenue going to the Exchequer from the profits of their trade. This is, yet again, a self-defeating exercise by the Government.
We should remind ourselves that the Labour party came to power promising an end to boom and bust, but the increase in stamp duty will accentuate the danger of boom and bust. The research carried out by Scott and Currie says that
in 1996 the value of loans that could be secured against the industrial and commercial sectors' holdings of property was below their actual borrowing.
In other words, even before the Government came to power, companies, in aggregate, were borrowing to the very limit of their borrowing powers against the value of their commercial property holdings.
If greater volatility in the value of commercial property results from these changes, there will be a greater chance that those values will fall below the level acceptable to the banks that are lending to those companies and a greater chance of some of those companies being forced into receivership or bankruptcy.

Mr. Bermingham: Is that not economic madness? Investment in property is tax deductible and allowable in a business sense and interest rates have fallen considerably since the Labour party came to power. If one is offset against the other in accountancy terms, the rise in stamp duty is a minor matter compared with the benefits of interest rate reduction and other tax reliefs since granted.

Mr. St. Aubyn: I entirely agree that economic madness is at work here. The economic madness is that every 1 per cent. increase in stamp duty leads to a loss of between 3 and 5 per cent. in the capital value of all commercial property. All other things being equal, that is its effect. If the commercial sector has borrowed against property, in aggregate, as far as is prudent, the measure will push borrowing to imprudent levels. A greater danger of boom and bust is being created.

Mr. Bermingham: If its value is pushed down, commercial property is made more readily available to more investors. That is not a loss to the investing world at large. Interest rates have tumbled and people can borrow at cheaper rates, which seems to me to be an economic gain for the long term.

Mr. St. Aubyn: I am grateful to the hon. Gentleman for pointing out that, if his Government create a busting


economy with lots of people going under, there will be a lot of cheap properties around for others to pick up on the off-chance. That is not the sort of economy that the Government inherited or that they promised to create, but they will create such an economy if they carry on down this blind alley in which tax increases are more than offset by the damage to wealth across the country and, more importantly, by the damage to wealth creation.
We have touched on other issues. Stamp duty has an effect on goodwill and on patents, and the measure is a wholesale attack on many things that the Government say that they are in favour of. They want to create an enterprise economy and say that they support innovation, but brand names and new inventions will be taxed at a higher rate as a result of the increase in stamp duty. I cannot see how that fits in with any serious wish to achieve a more vibrant economy.
Many of the companies that will be hardest hit by the increase in stamp duty turn over between £500,000 and £5 million a year. Under the previous Conservative Government, the most significant growth in the number of companies took place in that part of the economy, which is also where the most significant increase in the vitality and job-creating power of our economy occurred.
Interestingly, it has been estimated that even a 0.5 per cent. increase in stamp duty will lead, over a few years, to the loss of more than 5,000 jobs throughout the economy; more significantly, it has an opportunity cost for the firms that have created the most jobs in recent years. The firms trading between those turnover levels are most typically dependent on bank borrowing set against their property holdings. Across the board, property can typically amount to about half the net book value of such businesses and it is an important asset that will be considered by the banks.
We all know that, in an ideal world, banks should look at the business plan, cash flow and prospects of the companies to which they lend money, but the reality is that, although banks check that the figures add up, they do not have the time or the expertise to assess how realistic those plans are. As well as trusting the judgment of the businesses and the business managers to whom they lend, they very much trust to the security of the assets against which they lend.
Taxation that damages the value of those assets way beyond the amount of tax revenue yielded damages the ability of those businesses to expand. Yet again, the economy is being led up a blind alley. Comments from Labour Members have shown that old Labour is rearing its head in an avaricious attack on wealth in this country. That is what the measure is really about. I tell Labour Members that 10 per cent. of my constituents are directly affected by it—we might as well go back to the days of surtax. They promised in the election campaign that they would not raise taxes, but they are indeed doing so, and targeting taxes in a way that will certainly affect the incentives in our economy.
It is also worth bearing it in mind that the cost of stamp duty will be spread across all businesses and all levels of society. If people who are buying large properties have to pay more in stamp duty, they will have less to spend on improvements and other work on their properties that they might want to undertake. Therefore, they will be less able to carry out those improvements and one of the ways in which there is synergy between different sectors of the economy will be lost.
There will clearly be a knock-on effect. [Interruption.] That seems to be a matter of amusement for Labour Members, but I have calculated that, for my constituents, the increase in stamp duty is equivalent to a tax of £100 per household per year. That is the extent of the damage that will be caused by what the Government are doing.
We have already heard that property taxes in this country are the highest in Europe, but, in fact, they are among the highest in the world. Only in the economic area of north America does the level of property taxes, in aggregate, begin to match that which we now have in this country. Far from an increase in stamp duty achieving harmonisation with the rest of Europe, it will put us way out of line.
In this country, the proportion of taxation on property as a percentage of national income is twice the European average. The total amount taken in property taxes in this country is 10 per cent. of all taxes, which is higher than the proportion taken in property taxes in any other EU country.
The implications are serious. We had a thriving commercial property market, but we may end up with a dead market. We had a commercial property market that attracted a significant amount of inward investment in Europe—building bridges between our economy and the economies of our European partners, something that I thought that Labour Members favoured—but we are putting up a sign saying, "Not for sale; do not come here—the taxes are far too high."
There is an even greater concern. If we are already at the peak of the taxation, in aggregate, that property can bear—that is the message we are getting from around the world—what will be the effect of the measure on local property taxes? A significant part of property taxes are raised through rates. The increase in stamp duty will mean that it will simply not be possible to increase rates as well. There will therefore be an effect on local government. The measure is a tax grab by central Government—the Treasury—at the long-term expense of local government revenue. That is where we are heading by going down this route. Whatever the pros and cons of taxing property through rates, it is better to have a known and, since the previous Government, stable level of taxation year in, year out, than a level of taxation that is affected by the incidence of businesses moving.
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There are many reasons why businesses move, but one of the most significant is that they outgrow their premises and want to move to more modern premises. That is a very important part of the process by which we protect the green belt, as brown-field sites become available. If businesses find that the cost of moving has become prohibitive, they will stay put and give up the opportunity for extra growth and employment, and the Government will lose the extra revenue that would have resulted from that. As a direct consequence, there will be an increasing shortage of brown-field sites. If it is a Government priority—it is one that we feel they have not pushed far enough—to have more brown-field sites developed, they will find that that is simply not possible, or the cost of brown-field sites will get out of kilter.
All those reasons show why stamp duties are wrong. I leave the Committee with one final thought, which I hope that the Financial Secretary will bear in mind.


She and her colleagues may think that stamp duty is some kind of economic regulator and that, because they inherited such a strong economy, increasing it will be a crude means of restraining increases in property prices. That may work well, but, when it comes to a slowdown or a recession—no economy is immune from recessions—the correct thing to do is to reduce stamp duty. However, to do that at that stage would be entirely counter-intuitive for the Government because, in a recession, all Government revenues are under pressure. A Labour Cabinet would simply not agree to cut stamp duty when budgets for schools and hospitals were under pressure.
In other words, this is a one-way street. Stamp duty is going up—we need to know how far—but it will not come down. Far from being an economic regulator, it is a mechanism for creating boom and bust in the economy. That is a fundamental reason why the measure should be opposed tonight.

Mr. Colin Breed: I understand that we shall debate the clause stand part a little later, so I shall confine my remarks purely to the uniform business rate. First, I declare an interest, which is in the Register of Members' Interests. The business concerned is under offer and may therefore incur stamp duty.
I have always wondered why trading businesses have had such a desire to buy property. Whether they are manufacturing or commercial businesses, so many of them want to lock up a considerable amount of resources in the almost dead asset of the building from which they operate. As a former bank manager, I have always suspected that that practice has been driven by the banks, which promote loans to companies and businesses for the bricks and mortar over which they can then obtain a mortgage and security.
Many businesses in the past, and some even today, have undertaken long, fixed-term borrowing on rates well in excess of the current rate and cannot extricate themselves from that borrowing agreement. They find their cash flow locked up in significant interest and capital repayments to pay for the very premises from which they operate, rather than having that cash flow available to expand their businesses and to invest in equipment.

Mr. Jack: Can the hon. Gentleman confirm, given his position as a former bank manager, whether he would advise his customers that the proposals that we are considering tonight apply also to leases?

Mr. Breed: Yes, they apply to most property leases.
An enormous amount of productive capacity is locked up in the dead asset of property and buildings. The Government and the business community have not recognised sufficiently the fact that an enormous number of successful businesses, particularly in America, own virtually nothing and lease virtually everything. They use their profit streams to expand at a greater rate.
It has been estimated that some 50 per cent. of all the borrowing currently undertaken by businesses is somehow connected with property purchases. That shows what an enormous amount of money is tied up in buildings. It may make some people think twice about what they should be doing.
On interest rates, the money that is locked up is often considered as fixed-term borrowing. When rates are volatile, that can sometimes be advantageous, but, at present, there is no doubt that it is very disadvantageous. I could not quite follow the argument about the Government's property portfolio. I had hoped that the Government would dispose of some of their property by putting the money to productive use and releasing the capital in some way. Although it may theoretically have a reduced book value, while it is still on the books it is not necessarily doing anything. We should like to see the funds from such property assets released and put into other areas. I therefore do not quite follow the logic of reducing the book value, although there may be less revenue coming from it. We want a real release of property, which would then provide the means by which the Government could improve public services without increasing taxes.
Most business men would like to get rid of the uniform business rate. They do not want it used as a measure of whether they pay stamp duty or not. The businesses that I know do not sell their property voluntarily; regretfully, the property is sold beneath them. They are worried not about expanding their business but about retaining it. It can be argued that, if stamp duty goes much higher, it will affect the commercial property market. However, the rises proposed by the Government will not cause such a scenario.
There is a long way to go yet. Most of the small businesses that I come across in Cornwall would love to have potential assets of £250,000 or £500,000. We are essentially talking about relatively small businesses, which do not tend to change their premises regularly. Indeed, they often struggle to retain them.
I broadly support the measures. The suggested rates and thresholds in the current proposals do not signal the dire events that have been predicted by the official Opposition, who want to exempt properties subject to the uniform business rate. The Liberal Democrats are prepared to follow the Government on this, and we shall not support the amendment.

Mr. Leslie: I was interested to hear the Liberal Democrat spokesman, and I agree with his acceptance of the need to increase stamp duty. Listening to the hon. Member for Guildford (Mr. St. Aubyn), one would have thought that the end of the world was nigh. My violin was ready to play a sad song. The tears were streaming down my face at the thought of the terribly poor people who would be affected by this wicked, nasty tax. It was nostalgic to hear again the trickle down theory of economics from the hon. Member for Guildford. He said that this imposition of a half percentage point increase in the rate of stamp duty on properties costing £250,000 or more would make every household in Britain £100 worse off. To hear him talking, it was as though the whole economy hinged on the increase.
The amendment is a typical example of the Conservative party representing the privileged few and not the many, as it has always done and will continue to do, despite the statements of the right hon. Member for Hitchin and Harpenden (Mr. Lilley).

Mr. Gibb: Is the hon. Gentleman aware that, when a new housing development is built, the house builder purchases a large slab of land that costs more than £500,000? He will


pay 3.5 per cent. stamp duty on that purchase, which he will then pass on to the purchasers of the houses on that development. Those houses may be very small.

Mr. Leslie: The trickle down theory continues to expand. It is amazing to watch that happen. The hon. Gentleman's intervention enables us to talk about the impact on residential areas. He argues that, at some level, there will be a charge on commercial transactions. That opens up a gamut of possibilities for us to underline the fact that 96 per cent. of residential properties are completely unaffected by this change in the Budget.

Mr. St. Aubyn: Does the hon. Gentleman realise that, after the increase in stamp duty last year, the property sector of the quoted sector of the market fell by 20 per cent? Does he realise that most commercial property is owned by savings institutions, such as insurance companies and pension funds, which represent the interests of the very people for whom he claims to speak, but whom we are speaking for tonight.

Mr. Leslie: Commerce is a wonderful thing but, as my hon. Friend the Member for Halton (Mr. Twigg) said, if this were such a dreadful imposition, businesses in our constituencies would be queueing at our surgery doors to complain about it. I certainly have not had any correspondence about the issue. I notice that Arthur Andersen has sent a briefing to Conservative Members: I have not received it, but it would be nice to see it.

Mr. Bermingham: I have just done a little calculation to test Conservative Members' lack of knowledge. A developer would probably pay about £1 million for five acres. He would pay about £33,500 in stamp duty and build 28 houses to an acre, which is about 140 houses. That is around £200 per house.

Mr. Leslie: That is an interesting calculation, and there are plenty more to be made. I was interested in getting some information from the Conservative Front-Bench spokesmen about the effect of passing the amendment on Exchequer revenue yields. They had not even bothered to think that through. They were not particularly concerned about how much would be lost to the Exchequer should their amendment be passed. By the sounds of it, as my hon. Friend the Member for Halton said, they were not concerned about whether their amendment was passed because they intended to vote against the clause in any case, whatever happened.
There are varying views about how much money would be lost if the amendment were passed. The hon. Member for Guildford came up with the interesting wheeze that no money would be lost to the Exchequer, because if we increase stamp duty, the revenue for the Exchequer would be increased. Thank goodness he is not in charge of the economy, although who knows what is happening in the Conservative party these days. He could well be shadow Chancellor before too long. What a day that would be. We look forward to such changes as they emerge in the coming hours.
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An interesting aspect of the amendment is the relationship that it would create by linking any exemption to the uniform business rate. I am rather curious about that. Would certification be necessary to prove that a person was liable for the uniform business rate? How much would it cost to administer the system, who would administer it, and how would it be paid for? The Conservatives have not explained how the system would be administered, and they did not implement it when they were in office.
I am interested to note that the Conservatives have stuck to at least one principle in opposing any change in stamp duty from the present 1 per cent. level. As a result, the revenue to be gained from all the income generated by such a change would be lost to vital public services. There are a number of views about how much would be raised by the application of the clause, but I understand that it is around £370 million. That would pay for about 100 schools, 15 hospitals or seven bypasses, the Bingley relief road being an example. The Red Book mentions a figure of about £220 million in relation to the upgrade of child benefit to £15—

The Temporary Chairman: Order. The hon. Gentleman is straying rather wide of the amendment.

Mr. Leslie: Thank you for the prompt, Mr. Butterfill. I was merely trying to prove that, if the amendment is carried, the revenue that would be lost would make it impossible to pay for the increase in child benefit, for example. We know from experience that, when the Conservatives oppose revenue yield measures, they want to cut welfare.

Mr. Jack: Why does the hon. Gentleman favour raising—particularly from business—additional revenue by raising stamp duty?

Mr. Leslie: I think that stamp duty is a very progressive way of raising revenue. It is a fair tax, in that those with significant assets pay proportionately more. A strong principle underlies that philosophy of progressive taxation.

Mr. Geraint Davies: Unfortunately, I had to leave the Chamber briefly, so I may have missed something. Have the Opposition given us any idea how much the amendment would cost when combined with the earlier amendments, which would have cost billions of pounds, and the abolition of the fuel duty escalator, which we discussed yesterday? How much would it cost in terms of value added tax on domestic fuel, cutting services and so on?

Mr. Leslie: An Adjournment debate may well be called for. The country will be clamouring to know just how the Conservatives intend to fill the black hole that would result from the passing of amendment No. 3. Where will the money come from to pay for vital public services?

Mr. Gibb: Are not Labour Members merely reciting a list of stealth tax rises implemented by their Government? Are they not doing our job for us?

Mr. Leslie: It is possible to view the situation from the perspective of a responsible Government who are seeking


to pay for vital public services. If we could not raise revenue, we would not be able to spend it on schools and hospitals. I thought that the right hon. Member for Hitchin and Harpenden was saying that the Conservatives wanted an extra £40 billion for schools and hospitals, but they clearly do not. Amendment No. 3 would chip away at the money that they would have to spend on those vital public services.
I know that the Conservatives are in turmoil this evening, and I realise that the Leader of the Opposition is making a very important speech that is essential to the future of the Conservative party, but I think that we should sort out how the Conservatives are to secure the revenue base of the nation's finances before we can ever expect the return of a Conservative Administration.
There are other reasons why I think that the stamp duty changes are worth not only considering but supporting, not least because of the current state of the property market across the United Kingdom, and the increased property values that have been reported in recent weeks in very many studies and newspapers. We should focus on the stamp duty's regulating effect in preventing a return to boom and bust in the property market, in attaining market stability and in capping the large speculative exchanges that were symptomatic of the 1980s. The Chancellor, in proposing the measure, has taken early action to prevent a worse fate later. The stamp duty changes will help to prevent that fate.
The hon. Member for Guildford also made the interesting point that stamp duty rates are so much lower across Europe, and that the United Kingdom Government are imposing a very heavy burden.

Mr. St. Aubyn: I know that this is a very difficult subject for the hon. Gentleman, but I was referring to the total of taxes on property, of which stamp duty is a part. The total tax take on property is much higher in the United Kingdom than in the rest of Europe.

Mr. Leslie: I am grateful for that implicit recognition of the fact that the United Kingdom stamp duty rate is very competitive. Compared with stamp duty rates of 9 per cent. in Ireland, 8 per cent. in Italy and 6 per cent. in Spain, we have a very competitive rate, of which we have much to be proud. We have a prudent Chancellor who proposed in his Budget only a minor change—a mere 0.5 per cent. increase—in the stamp duty rate. The context in which the decision was made included the factors that I have described, and the need to keep an eye on the United Kingdom's economic stability and to be prudent with its finances.
The debate has highlighted the contrast between the Government, who are concerned with achieving stability in the property market and securing the tax base, and Conservative Members, who clearly stand only for the few and not the many. I believe that the measure should be supported, and that amendment No. 3 should be thrown out.

Sir Peter Lloyd: It is very interesting to follow the speech of the hon. Member for Shipley (Mr. Leslie). However, I should correct him on one or two of the assumptions that he made about Conservative

Members' motives. We are criticising the Government's proposed tax not because of the effect that it will have on rich people, as he describes them, but because we believe that it will detrimentally affect growth and jobs. The hon. Gentleman laughs. I am surprised at that, as I should have thought that he would at least know that one may increase economic activity by reducing taxes, so that the take from the lower taxes is higher than it was before they were reduced.

Mr. Leslie: rose—

Sir Peter Lloyd: If the hon. Gentleman will tell me that he knows that, I shall happily give way.

Mr. Leslie: I hope that the right hon. Gentleman will welcome the reduction in the corporation tax rate and the imposition of a new, lower l Op starting rate of corporation tax.

Sir Peter Lloyd: I certainly applaud reduction in corporation tax, but am not so impressed with the lop rate, which I should have preferred to be wrapped up in the lower standard tax rate—so that the tax threshold started later, and some more small companies would not have to pay any tax. I think that that would be a much better use of the time of the Inland Revenue and of Customs and Excise and much better for small businesses. The rate that the hon. Gentleman mentioned is really rather gimmicky, as is so much of the Budget. However, I should return to the amendment, to which I know that the Chairman would like me to speak.
Today will be the third time that the Government have raised stamp duty. It went up in 1997, again in 1998, and will undoubtedly go up again today, when the Government's large majority moves through the Lobby. I can appreciate why the Government have followed this course—they want the money, and there are plenty of good things on which Governments spend money. Although I do not always agree with the Government's spending choices, I do understand why they try to maximise the revenue that they take.
Increasing stamp duty is a way of raising extra money that the general public do not notice. It does not affect most people directly and they will not connect it with the malign impact that it may have further down the line. They certainly do not make the connection in the constituency of the hon. Member for Halton (Mr. Twigg) and I doubt whether many people do in my constituency. They have other more immediate worries. Nevertheless, it will have an effect that should concern us on behalf of our constituents.
Stamp duty on commercial property is such a soft option in respect of the average voter—and some hon. Members—that, no doubt, the Government will find it impossible to resist the temptation to raise it still higher in future years, not just because it is easy, but because the Government intend to join the economic and monetary union. One way of hastening harmonisation would be to increase stamp duty to the higher average of continental countries with the minimum fuss. If that is their objective, the Government should remember, as some of my hon. Friends have reminded us this evening, that, although stamp duty or its equivalent is generally higher in Europe than it is here, that is not the case in all EU countries.


So, unless the Government accept that tax harmonisation must be at the highest rates, they should be careful about imposing increases.
Even more to the point, as my hon. Friend the Member for Guildford (Mr. St. Aubyn) pointed out a couple of times and again in an intervention, taxes on property are much higher in the UK than they are in the rest of the EU. If the Government seek a level playing field with Europe, they should cut total taxes on property instead of raising them.
I hope that, in her reply to the debate, the Minister will confirm that she recognises that property taxes are higher in the UK and let us know whether the Government intend to call a halt to increases in future years. I do not expect her to do so as a personal favour or in the cause of cross-party co-operation. Of course I realise that Governments can save themselves a great deal of trouble if they keep open as many options as possible. However, I am allowing myself a little hope because I assume that the Minister will want to observe the requirements of the Government's code of fiscal stability, which was also mentioned by my hon. Friend the Member for Guildford.
The code commits the Government to operating fiscal policy in a way that is predictable and consistent with high and stable levels of growth and employment. I know that the Minister can talk and listen at the same time, although not all her colleagues can do that. Will she make clear, in the spirit of the code, what the Government's medium-term intentions are in respect of stamp duty? Whether or not she tells us, I fear that the effect of increasing stamp duty will distort that part of the economy.
I am talking particularly about commercial property and the analysis of Arthur Andersen and the London business school. I was not sent a copy directly; I acquired it from one of my hon. Friends, so I am very happy to pass my copy over to the hon. Member for Shipley, who badly needs to read it. I hope that, in another debate, he will tell us why he has converted or his real reasons for disagreeing with it.
My hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) mentioned the study, as have several of my hon. Friends. The analysis makes it clear that increases in stamp duty have a surprisingly strong negative effect which is then multiplied through the economy. The Government have already increased stamp duty on commercial property worth more than £500,000 from 1 to 3 per cent.
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If the Government have their way, the level will rise to 3.5 per cent. Arthur Andersen calculated that an increase of 1 per cent. in stamp duty will lead to a fall in property values of 4.5 per cent. or more, compared with what they would have been. So the effect of stamp duty increases is to reduce the value of the Government's stock of property—worth about £100 billion or £110 billion—by about £5 billion, or more.
That will produce a negative impact on the national balance sheet, but it will have a broader effect on the rest of the economy. The borrowing of the industrial and commercial sector totals about £200 billion, which is roughly equivalent to the value of the property that it holds. Therefore, on the same basis, a 1 per cent. increase

in stamp duty reduces the value of property in the commercial sector by £10 billion or more from what it would have been.
That will make it difficult for some commercial organisations to borrow. At best, it ensures that their capacity for borrowing does not expand as it could have done, and that they are unable to make the investments or take on the extra staff that they otherwise would. The main effect of increased stamp duty is to reduce growth and employment levels below what they would have been.
That is true especially of small and medium-sized businesses, which generally do not have access to independent finance and so must rely on the banks for loans. As we have heard—from a former bank manager—the bank's aim is to secure loans on property. In addition, an increase in stamp duty has an effect on the readiness of proprietors and managers to make property purchases and move to better and more suitable premises. Acquisitions are therefore postponed, and the Government get less tax, as my hon. Friend the Member for Guildford explained.
When some such firms are obliged to make a move, they are bunched together, which compounds the cyclical character of the commercial property market, and thus of the economy as a whole. That is surely the last effect that a Government who constantly claim to want to put an end to boom and bust should want to achieve.
The Minister may have a view of the analysis by Arthur Andersen and the London business school. If so, Conservative Members will listen with interest. However, if the analysis is only half or a quarter right—or if it applies only for one tenth of a per cent., in Halton—the Government should still accept the amendment.
If they do not, it will be clear that their vaunted code for fiscal stability is infinitely elastic, and that they prefer a politically easy tax that will reduce growth and jobs to levels lower than they might have been to the political pain of raising the money by another means or of holding down rises in public expenditure. Despite all the concern expressed for small and medium-sized enterprises, it will be clear, too, that the Government are prepared to allow that sector once again to bear a disproportionate share of the burden.
Finally, although the Government claim to be putting an end to boom and bust, it will be clear, if they reject the amendment, that that claim is more of a slogan than a serious objective.

Mr. Bermingham: When I came into the Chamber during the opening speech by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), I thought that we were talking about window taxes, so archaic were the arguments and so ancient the principles involved. It gradually dawned on me, thanks to a few probing questions, that the Opposition had reached the beginning of the 20th century, although not the latter part. Opposition Members seem signally to have failed to understand what stamp duty is all about. I declared my interest as a former solicitor a long time ago, Mr. Martin.
We may divide the problem into two sections, private and commercial, and I shall deal first with the private section. Stamp duty in the private section is singularly low. If, as has been claimed, we seek to harmonise with Europe, we have an awful long way to go to reach Ireland's rate of 8 per cent. And Ireland is certainly not


in harmony with Germany, France or Denmark, although all but the last are part of EMU. That argument faces a small hurdle.
Who is affected by high rates of stamp duty? Clearly, it is those who buy posh houses. My constituency is not very rich and there are not many houses that cost more than £200,000. A little area, Eccleston, has some such houses, but £28,000 is nearer the mark for most of the constituency.

Mr. Jack: On a point of order, Mr. Martin. The amendment deals with the effect of stamp duty on business. I have listened for some moments to a discourse on estate agency and big houses. Is the hon. Gentleman in order?

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): The right hon. Gentleman is quite right. We are discussing business duties. However, a little leeway is sometimes given so that hon. Members may lead in to their case.

Mr. Bermingham: Thank you, Mr. Martin. I have listened to so much about the private housing sector and the 7,000 people who will be affected in Guildford that I thought that I was quite in order in making a few preliminary remarks.
I pointed out in an earlier intervention that, if one bought £1 million worth of commercial land for redevelopment, the total duty would be roughly £35,500, assuming that the purchase price was around £200,000 an acre, giving £200 per house on a five-acre purchase. In my part of the world, ordinary building land costs about £30,000 an acre, and the figure drops to about £20 for each property. That shows the fallacious stupidity of the Opposition's arguments.
Let me turn to commercial matters. I missed a golden opportunity tonight and I shall be kicking myself into next week. We heard a bank manager speak, and I was desperate to ask whether he considers the banks' 4 per cent. over base to be profit. That question falls outwith the remit of the debate, but I almost succumbed to the temptation, and I shall ask again in future.
What will be the effect on commercial property of increasing stamp duty? People who build commercial property do so for one of two purposes—to sell, or to let. If they build to let, there is, of course, stamp duty on the lease. Everyone knows that. The total cost at which they will lease in a competitive market depends, however, on the amount of property available and the number of lessees.
If property is built for sale, the costs of stamp duty on the purchase of the land will naturally be incorporated. Just as with private homes, the amount involved is pretty insignificant and does not affect the market. However, it begins to drive prices down in both the private and commercial sectors.
What has been wrong with British industry for the past 30 years is that it has looked on commercial properties as capital assets that exist for gain or—by lease back or other means—disposal and retention. That creates an artificial profit that in turn drives up prices in both the commercial and private housing sectors, and that disadvantages everyone.
We need to regulate the commercial sector and educate banks. In particular, we need to educate accountants—the destroyers of British industry over the years—to realise that items on the balance sheet should work for the business, as in the American economy, and not act as a bulk, a safety net or a caution point. What is the use of owning £1 million worth of factory floor space if throughput of £10,000 a month is needed to create a viable business? Renting property rather than buying leaves capital available to be used. If we could only educate the banks and accountants—the death knell of British industry—we might achieve something.
The measure will be cost effective. It will not create a great deal of wealth, but it may drive down private sector housing prices and commercial property costs, both for buying and leasing, a little. If it does that, the economy will benefit.
If ever there were an example of investing to accumulate, it is here. One does not invest in buying, one invests in renting, to give one the space to manufacture. In the end, it is manufacturing, not property, that makes money. Property represents an illusory gain—an illusion that has cost this country dear.
The Opposition have already said that, even if they win the vote on their amendment, they will vote against the clause, which is totally illogical. I ask them to justify the insanity of the position that they have adopted.

Mr. Jack: One is always deeply suspicious about the motives of the Treasury when the Government make a tax change but do not justify it. We are talking about the impact of the changes in stamp duty on business which would result from the amendment that we have tabled suggesting that those who pay the unified business rate should be exempt from the increases in stamp duty.
If the Government had a positive story to tell about why businesses should be subject to higher rates of stamp duty, one would have thought that some mention would have been made of it in the "Financial Statement and Budget Report" before page 99. One has to wait until then to find the simple announcement of the changes in stamp duty rates.
One can conclude by a sort of reverse logic that, as the section of the report that deals with raising productivity and improving the prospects of business does not contain any mention of the changes in stamp duty, they must be bad—QED. Therefore the Government's explanation in their own publication is that the changes do not represent a business-friendly tax. If they did, the Government would have said so.
I shall talk about the impact of the tax shortly, but first I refer the Financial Secretary to paragraph 3.19, on page 37 of the "Budget 99" document—the Red Book. She might find it interesting, because it is the paragraph that eulogises the effect on businesses of the reduction in corporation tax to 10 per cent. on the first £10,000 of profit.
Intriguingly, if the same business that was looking forward to the reduction in corporation tax sold a building worth £250,000 as part of its expansion programme, the increase in stamp duty would negate the additional profits that the Government had allowed it by virtue of the changes in corporation tax.
That simple example illustrates clearly what many hon. Members who have spoken so far seem to have missed: this is not, as the hon. Member for St. Helens, South


(Mr. Bermingham) seems to think, a discussion about big houses. It is about the impact on small and medium-sized enterprises.
The hon. Member for Shipley (Mr. Leslie) seemed to say that, because we were dealing with the sale of property in business terms and there were big numbers involved, in some magical way that made the tax affordable. The hon. Gentleman missed the fact that the assets and capital value of a company, if it has decided to purchase a building—or its major operating costs, if it has decided to lease a building—may be tied up in that building. If the firm moves to expand its premises by sale, or by ending one lease and buying a new one, it will not be able to afford to lose out of its balance sheet the money represented by the increase in stamp duty. That money has to come from somewhere. If the Government increase their take at the point of sale or change of lease under the circumstances that I have described, it will effectively come off the company's bottom line.

Mr. Breed: When a company or business moves, it is an enormous event in its lifetime. A great range of costs is incurred—not only removal, but stationery and so on. What percentage of the total costs does the stamp duty represent?

Mr. Jack: With respect, the hon. Gentleman misses the point. The percentage that it represents is irrelevant. It represents an additional expense, and there would no need for it to be incurred if our amendment was accepted.
I would appreciate it if the Financial Secretary were to respond to my next point. It is instructive briefly to consider the history of stamp duty because it is important that the Government should justify why they change rates and increase the taxes that they impose on business. Interestingly, stamp duty arose in the Netherlands in 1624 as a result of a competition to find a new form of tax. It strikes me that there has been a competition in the Treasury to find novel ways of raising money. When the tax first came to this country in 1694, it was levied on the materials of business of the day—vellum, parchment and paper. Not much has changed in the past 300 years.
I embarked on that historic voyage to make the point that stamp duty's original purpose was to extract tax revenue from company income when there was no corporation tax, uniform business rate or other business tax by taxing capital transactions. The hon. Member for Shipley asked why we should deny ourselves the extra revenue. Given that there are now other means of taxation, can the Financial Secretary say why the Government have chosen to raise additional money from business via stamp duty? I accept the criticism that we did not tackle the question of whether stamp duty was a valid tax but, as the Government have embarked on what I would call exploiting a nice little earner, they should publicly justify why this tax and not others has been chosen.
Labour Members have played down the impact of the changes on the burden on business. I asked the Library to produce a table examining the impact of the stamp duty increase and a commentary on its effect on business. In the financial year that we have just entered, the effect of the changes is £1.3 billion. That rises, in cumulative terms, in the next financial year-taking into account the previous stamp duty changes-to £1.4 billion, with £1.4 billion estimated for the year 2001–02. The total

effect of the Government's changes to stamp duty rates will be a cumulative extra tax take of £5.2 billion. It would have been interesting had the Chancellor had the courage when he came into office to say that he proposed to increase business taxes over the next four years by £5.2 billion. He did not have the nerve.
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However, we can see what the effect would have been had the Chancellor done that. I should point out that the amount would be £5.2 billion overall. According to the Library, it is estimated that 60 per cent.—that is £3 billion—will fall on business. That is in addition to the extra taxes that business is already having to bear through the corporation tax changes introduced by the Government. That shows why my right hon. and hon. Friends on the Front Bench described that operation as a stealth tax. It may not occur often in individual businesses, but the cumulative effect shows that the tax has turned into a nice little earner for the Treasury.
It is evidently an uneven tax in its impacts on different parts of the country. In areas where property and land values are higher—London and the south-east—there will be a disproportionate tax burden to bear. However, if we consider the problems of east London and business development there, we find that that area is in almost as much in need as some of the so-called derelict parts of regions such as the north-east and the north-west, which are traditionally seen as difficult. This measure comes from a Government who are supposed to be business friendly.
When we look across the net receipts of Inland Revenue taxes, an interesting pattern emerges, which explains why business is now being asked to pick up the tab for this extra stamp duty. At the beginning of this century, stamp duty was hardly noticeable—it raised only £8 million. However, the total effect of the Government's proposals for the current financial year is that £5.7 billion is written into the Government's estimates. If, as a starting point, we compare the levels of stamp duty that will be raised in the current financial year with the levels in the financial year in which the Labour Government took office, it is clear that stamp duty has risen by plus 65 per cent. in their estimated receipts. If we bear in mind the finding that 60 per cent. of the burden will fall on industry, business and commerce, we begin to see what the Government are about.
I suspect that the Financial Secretary will have received analyses from the Inland Revenue showing that receipts from another business-based tax—petroleum revenue tax—were rapidly dropping and that capital gains tax and inheritance tax were of limited value. She would have been told that stamp duty had magically become the No. 3 earner among Inland Revenue taxes. She would have been told: "What a good idea it would be, Financial Secretary, if you visited this rather neglected area, because it is a nice easy tax. You will not get too many queues of complaining people at your door. Let's have a go". My God, she took the bait in full measure.
However, we must not lose sight of another stealthy bit of Government activity. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) will recall tabling a parliamentary question in which he attempted to elicit the facts about how the tax burden between residential and commercial property would change over


time as a result of the changes in stamp duty. Interestingly enough, in the financial year 1997–98, 60 per cent. of stamp duty was raised from residential property and 40 per cent. from commercial property. However, the Treasury's own estimate for the year 1999–2000 is that that burden will be evenly shared between business and residential property. There is an element of politics creeping into this issue; it is clear that the Government think that business is a soft touch, and that no one will complain too much, so there is an element of burden shifting.
The burden of stamp duty is rising for business—hence the earlier remarks of my hon. Friends who drew the attention of the Committee to the problems that would arise in the property market. The Financial Secretary should give the Committee some economic analysis—or lay the information in the Library, if she does not have it with her—if it is necessary to repudiate the arguments made by Conservative Members this evening.
The British Federation, whose report by the London business school has been quoted, has spent a lot of money justifying its point of view. Perhaps the Financial Secretary would like to produce her own analysis to reassure, if she feels it necessary, the business community that it will not be adversely affected, as my hon. Friends have predicted.
Without doubt, there are long-term implications. It has been reported that the Government's measures will reduce liquidity in the business sector and inhibit the ability of industry to take on new space. Mr. Angus McIntosh, a director of commercial property consultants Richard Ellis, and therefore someone who is in the front line of business lettings and activities, says that the higher duty could threaten more marginal office and industrial schemes, but adds that the retail market might well find a way around the problems. I thought that the Government wanted to encourage the sort of office and industrial schemes that typify many areas of industrial renaissance. Can the Financial Secretary really be promoting a policy that appears to act against the objectives expressed in other parts of the Budget statement?
One of the Trojan horse arguments that has been advanced in respect of the Government's aims is that their proposals on stamp duty on business are a staging post on the way to higher business taxes, on a par with those of Europe. I join my hon. Friends in asking the Financial Secretary to give us some indication of the Government's policy in that specific area of tax. I know that she cannot stand up and say, "There will be no change in tax rates", because, even though the Government said that, they did not mean it. Instead, I should like her to concentrate on words that she does mean.
The Government find it easy to spend a great deal of time justifying and explaining their actions—for example, in respect of environmental taxes, they explained at length why some of the changes in vehicle excise duty and fuel tax had occurred; and they gave lengthy explanations of what they think are the likely effects on business of some of their changes to corporation tax. The Government clearly know the effect of what they want to do and they can plot the development of that effect in future. Therefore, if the burden on industry of stamp duty is to increase, we can be sure that the Financial Secretary received from the Inland Revenue and the Treasury an

analysis of the economic effects of that. She will be doing industry, business, commerce and the Committee a service if she shares those projections with us.
In the interests of stability and forward planning, the Government have been happy to offer their prognostications on the level of certain taxes at the end of this Parliament. If they can do that in respect of income tax or business tax, it is logical to assume that they can do the same in respect of stamp duty. If the Financial Secretary is unable to supply that information, she should tell us why not. A lack of figures would appear to reveal a degree of inconsistency in the Government's approach to projecting the effects of taxes, and the Government should be consistent in their approach to such matters.
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We are not talking about sums of money that are insignificant to the businesses concerned. My hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) spoke of the slab-slice dilemma, and it is interesting to convert slab-slice into money. The new proposals leave stamp duty on £249,000 deals at £2,490, whereas paying £2,000 more puts another £3,785 on the stamp duty bill. The Financial Secretary should explain why that sort of cliff-edge philosophy still finds a place in the Treasury.
It is sad that the contributions from the Government Benches have lacked any imagination. If the Government propose to use stamp duty as a creative tool, they should offer some imaginative suggestions as to its application. For example, why have the Government not considered relieving businesses in objective 1 or 2 areas of the stamp duty changes? That would be a positive way of encouraging new business development. By contrast, the Government have adopted a uniform approach. Why is there no regional differentiation? Why is the Treasury not using some imagination? As was mentioned earlier, why do the Government not encourage developments on brown-field sites by relieving them of stamp duty increases as a way of encouraging the use of such sites?
It seems that the Government are using stamp duty as a blunt instrument. They have not thought about it creatively—and it is time that they did. As a result of the Government's proposals, stamp duty on a £500,000 deal will rise to £17,500 per transaction. Stamp duty on a £3 million deal—which is modest by industrial standards—will increase from £90,000 to £105,000. An increase of £15,000 is not insubstantial.
Will the Financial Secretary comment on the findings that these proposals will reduce property values? A 1 per cent. increase in stamp duty will reduce property values by £25.6 billion. Several of my hon. Friends have said that Government stock will be reduced by £5 billion. Does the Financial Secretary agree with that figure? Has the resource accounting mechanism—which will be introduced shortly—made any allowances for that loss in value to business?
Does the Financial Secretary agree that the changes will amplify the fact that tax rates are rising in this country? Taxes on property in the United Kingdom are already twice the European Union average when expressed in gross domestic product terms. Tax equals 3.7 per cent. of GDP. Why is it necessary to raise business taxes further as a result of these proposals?


Has the Financial Secretary given any thought to introducing into this country the types of stamp duty exemptions that exist in other European regimes? For example, in Portugal, public bodies, social housing and business reorganisations are exempt from stamp duty, full stop—never mind any increases. I dwell on this point because, if the Government are anxious to develop stamp duty as a tax, it would be useful to know whether they will apply it creatively. If they do not, they will have to contend with a large avoidance industry.
It is unusual for tax avoidance practitioners to declare their hand. However, the Financial Secretary will find that, as businesses seek ways around the tax increases, the avoidance industry will limber up, ready to turn property and land into companies with share capital—bearing in mind that there is only 0.5 per cent. stamp duty on share transfers—that can be bought and sold. The higher rate will be 3 per cent. under the Government's proposals. Is that not a sure-fire way of relinquishing income in terms of business tax?

Mr. Bermingham: Is the right hon. Gentleman trying to tell the Committee that if Jack Investments Ltd.—I use the right hon. Gentleman's name as an example—has among its assets a factory and a green-field site, it will create a new company to take those two items from Jack Investments Ltd. so that the new company can be sold, and the factory and the green-field site can therefore be sold as shares in that company rather than as assets? That is totally ridiculous.

Mr. Jack: The hon. Gentleman says that it is totally ridiculous, but perhaps he would like to explain that degree of ridicule to the authors of the London business school report, who advance the view that I have just explained. The hon. Gentleman is entitled to his view, but I am certain that, in transactions of sufficient size, that type of avoidance mechanism will be used, particularly if the Government continue to increase the rate of stamp duty. Why should people pay tax unnecessarily if, to put it bluntly, there is a cheap way round it?

Mr. Bermingham: In such a mechanism, property would be assets bought by a company. If they were then sold on to a new company, there would be a capital gains tax liability, which would be a cost on the company, so to save a few pounds companies might create a tax loss of many thousands of pounds. To respond to the right hon. Gentleman's earlier point, I shall willingly take on the authors of that report—they do not seem to know what they are talking about.

Mr. Jack: The hon. Gentleman did not consider the roll-over mechanisms in capital gains tax. I am absolutely certain that people would take those into account.
Conservative Members have performed sufficiently well in the debate to demonstrate that the Government must clearly answer many questions to justify their proposal. The amendment would try to relieve business from that unnecessary tax.
Before I end my remarks, may I apologise to you, Mr. Martin, and the Committee for not at the outset declaring my registrable business interests, which are in

the Register of Members' Interests, in case anybody is concerned that they might have influenced what I had to say.

Mr. Clifton-Brown: Many points have already been made, so, in view of the hour, I shall keep my remarks brief. Before I begin, I should declare that I have property interests that could possibly be affected by the amendment and the clause. They are declared in the Register of Members' Interests.
Clause 99 increases stamp duty on the transfer of property valued at over £250,000 but less than £500,000 from 2 to 2.5 per cent., and on property valued at over £500,000 from 3 to 3.5 per cent. It is worth noting that this is the third time in two years that the Government have increased stamp duty. It is worth noting also that, for the bulk of the 18 years of Conservative government, stamp duty was fixed at 1 per cent. All objections to the tax have been multiplied many times because of its increase from 1 per cent. to a top rate of 3 per cent. I point that out in reply to the repeated interventions from the hon. Member sitting below the Gangway, who, I think represents Birmingham—

Dr. Lynne Jones: I am sitting below the Gangway, but the hon. Gentleman is confusing the name of the Member to whom he refers with that Member's constituency. I am a Member who represents Birmingham, but the hon. Gentleman who spoke is my hon. Friend the Member for St. Helens, South (Mr. Bermingham).

Mr. Clifton-Brown: The hon. Lady has made a stupid, cheap point. She knows perfectly well to whom I was referring.
Mr. McKee of the British Property Federation has said that we shall hear a wide variety of debate in industry about whether a 3 per cent. stamp duty is too much or whether it is not yet too much, but the real question is, "What are the Chancellor's plans for stamp duty?" That is the real question in this debate. The property industry and all the institutions connected with that industry are entitled to ask the Government what their long-term strategy is for stamp duty. Unless they have some answers to those questions, they will draw their own conclusions.
Like my hon. Friends, I shall quote a few facts and statistics from the Arthur Andersen report, compiled jointly with the London business school. One of its most startling predictions was that, in the short term, a 1 per cent. increase in stamp duty would lead to a decline in gross domestic product of 0.02 per cent. in year 1 and a 0.06 per cent. in year 3, and that this would be accompanied by a reduction of 11,300 people in work by year 4. In the longer term, additional factors would increase the reduction in GDP to some 0.05 to 0.1 per cent. I am pretty certain that not even the Government can tell the Committee tonight that the increase in stamp duty will have anything other than a deleterious economic effect.
It is worth noting how important the commercial property sector, which will he affected by this tax, is to the economy. It is worth approximately twice the entire gilt market. Although, in the mid-1980s, the value of United Kingdom equities was about 50 per cent. greater than that of commercial property, it is now three times


that of the commercial property sector. That illustrates the relative decline in commercial property as an investment medium. There is no doubt about it: in an increasingly international world, our investing institutions that invest in properties will carefully monitor transaction costs and, if they find that transaction costs on property are significantly higher in the UK than those not just in the rest of Europe but in the rest of the world—as is the case even now, when total property transaction costs amount to about 10 per cent.—they will vote with their feet and invest elsewhere, and that inward investment and our own domestic investment will be invested elsewhere.
It may be worth considering how we compare with some other European countries. As I pointed out in an intervention, the UK has the highest property transaction costs in the European Union, amounting to some 10.5 per cent.—higher than those in Luxembourg, our nearest rival, whose costs are about 8 per cent. In Austria, such costs are about 1.5 per cent., so UK costs are significantly higher.
As I also said in my intervention, France has become so worried about the effect of high property transaction costs that it has cut its transaction tax drastically, from a huge 18.5 per cent. to 4.5 per cent. The rate in Germany—perhaps our nearest major rival—is only 3.5 per cent.
Therefore, I would severely caution the Government, if they have it in mind to increase stamp duty significantly in future years. Although, on the surface, it might appear to be a cheap tax to collect and a soft option—indeed, a very good candidate for Labour's stealth tax—the longer-term effect on business activity in the UK is likely to be significant.
There are other aspects in which stamp duty is significant. As hon. Friends have mentioned, it has a big effect on company liquidity, reflected in balance sheets. It has been argued tonight that it is wrong for companies to own their commercial property, but I believe that that is pretty dangerous advice coming from a bank manager who is talking and not even listening to my speech, because he knows that many companies—including some of our best companies, such as Marks and Spencer—own virtually all their shops, and they have found that, in the longer term, that benefited them greatly.

Mr. Breed: Will the hon. Gentleman give way?

Mr. Clifton-Brown: As I have mentioned the hon. Gentleman, I give way.

Mr. Breed: Does the hon. Gentleman suggest that that will continue to happen in the next two or three years?

Mr. Clifton-Brown: It all depends on whether the Government take us into the euro, on long-term and short-term interest rates, and on how rents respond to competition. There are so many unknown factors that it is impossible to predict. I will not give any company generalised advice; I simply caution companies not to assume automatically that it will be cheaper to rent than to own property. That conclusion cannot necessarily be drawn.
I recall that, last year, commercial property shares took a real hammering after the Government increased stamp duty, and I would expect the same thing to happen this

year. I would also expect the value of commercial property immediately to be written down in the balance sheets of most firms' property portfolios. Any investing company will require a high yield, and that will have to he reflected in either commercial property transaction prices or higher rents for trading companies. We cannot necessarily draw any particular conclusions.
9.45 pm
Arthur Andersen has estimated that, even on conservative assumptions, an increase in stamp duty from 3 to 4 per cent. would decrease the value of commercial properties by 4 to 7 per cent. That would imply that the total value of commercial property would decline at a stroke, through the imposition of the clause, by between £25 billion and £42 billion. That shows that the clause will have a significant effect on business activity.
The three increases in stamp duty have already had an effect. Commercial property is now valued at about £193 billion, whereas, at the end of the 1980s, it was valued at about £280 billion. That has an effect on liquidity and on the ability of companies to borrow on the basis of the value of the commercial property held in their portfolio.
We should be looking to lower taxes for business. We want to stimulate business activity. We should not allow the cosy assumption that we shall harmonise taxes in Europe to lead us automatically to assume that taxes will be increased. This country should be a beacon in Europe—I hope that my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale), who is on the Opposition Front Bench, is listening to this, because I am sure that it will be of interest to him—for lowering taxes, not increasing them.
As I said yesterday, if we continue increasing taxes, as we are doing in this instance by raising stamp duty, we shall make more and more people unemployed. Total unemployment in Europe is now 18.5 million; with increased business taxes, it will become even worse. We shall make Europe even more uncompetitive compared with the rest of the world.
I have recently returned from Hong Kong—this is declared in the Register of Members' Interests. It is enshrined in the Basic Law that the maximum level of taxation in Hong Kong is 15 per cent. Every politician and every civil servant should be required to visit Hong Kong to see what a proper deregulated economy could do.
We should examine carefully what an increase in stamp duty will do. By far the largest amount of stamp duty is paid by the commercial sector. My hon. Friend the Member for Maldon and East Chelmsford is right to try to exempt commercial property. If we do not recognise the property investment sector as an important international investment medium, we shall suddenly find that inward investment will decline. The previous Conservative Government were successful in bringing investment into the country. At one point, over a 10-year period, we managed to attract a quarter of all the inward investment into the EU; that probably created 1 million jobs. It would be a tragedy if this Government, with their tax-raising ideas, started to reverse that trend and increased unemployment. I do not want that to happen, and nor do my constituents.
When the Financial Secretary sums up, I hope that she will give us an idea of the effect of the burden on industry of the increase in stamp duty. Much more importantly—


I return to where I started—I ask her to give the property industry an indication of her long-term strategy for stamp duty so that it can plan its investments, which, by their very nature, are long term, and so that investors can plan with certainty on the basis of a degree of known facts.

The Financial Secretary to the Treasury (Mrs. Barbara Roche): We have had a long, but thorough, debate on the amendment, which would exclude from the increases in the higher rates of duty any transfers of property to which the uniform business rate applies. Clearly, the amendment's purpose is to introduce a stamp duty relief for commercial property. Let me say at the outset that I do not believe that such a relief is called for, and I shall explain why.
The commercial sector of the property market is in sound condition and should be well able to absorb these small increases without serious difficulties. My hon. Friends the Members for Halton (Mr. Twigg) and for St. Helens, South (Mr. Bermingham) pointed that out.
According to the Investment Property Databank, the commercial property market has been strengthening in 1999. Returns from investment in property over the past three years—at 9.4 per cent. a year, adjusted for inflation—have been considerably better than the long-term average of 5.9 per cent. since 1986. Stamp duty is only one of the considerations involved in buying or leasing property; other economic factors, such as long-term interest rates and increases in capital values, are much more important.
The hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) raised a number of issues and I shall deal with them in turn. He asked whether there was a secret agenda to harmonise stamp duty with Europe. The Conservative party knows a great deal about secret agendas, but this evening I shall not dwell—not at length, at any rate—on its misery. United Kingdom rates are moderate; there is no European proposal to harmonise stamp duty, and there is certainly no secret agenda.
The hon. Gentleman then said that rises will wound ordinary home owners in the south-east. May I point out to him that ordinary home owners—on whom we have concentrated this evening—are enjoying the lowest mortgage rates for 33 years? I know that that is very popular in the country. He also spoke about something that is known as the slice system; I say that for the benefit of those Members who have just joined us in the Chamber. This is an example of the Opposition not fully costing their proposals.
Such a proposal would be incredibly expensive—it would cost £890 million—and lead to higher rates and a much more complex system. [Interruption.] The hon. Gentleman protests, but he is one of the people who have argued for simplicity. During our exchanges last week, I told him how much I admired his stance on deregulation. He has criticised Governments for not deregulating enough, but—as I had to point out to him last week, and have to point out to him again—the only problem is that he has been criticising the previous Conservative Government.

Mr. Clifton-Brown: Will the Financial Secretary give way?

Mrs. Roche: Let me make some progress, because I want to deal with what the hon. Gentleman said.
The hon. Member for Maldon and East Chelmsford also said that we were weakening the competitiveness of the City of London; that is certainly not its view. The Government are absolutely committed to maintaining a competitive environment in which the City can prosper.
The hon. Member for Guildford (Mr. St. Aubyn) raised a number of issues and, again, I shall deal with them in turn. He argued that a stamp duty increase would prevent local government from increasing taxes and asked whether the Government were carrying out a smash-and-grab raid. I note his enthusiasm for higher local taxes and I am sure that his proposal will be disseminated widely in his constituency. His argument is absolute nonsense.
The hon. Member for Guildford also said that the increase in duty on commercial property reduced the value of the Government's assets, outweighing the increase in tax revenue. The hon. Member for South-East Cornwall (Mr. Breed) rightly said that he could not see the point in that, but I am glad that the hon. Member for Guildford is taking an interest in the public finances. How unlike the record of the Government whom he would have supported, had he been a Member of the House at the time. Under that Government, borrowing reached £50 billion and the national debt doubled. It needed this Government to—

Mr. Jack: The Financial Secretary has just played back the remark made by my hon. Friend the Member for Guildford (Mr. St. Aubyn) and by me about the estimated drop in the Government property portfolio as a result of these proposals. She went on to make a party political point. May I bring her back to that figure and ask whether she agrees with it? If so, has any adjustment been made for that fact in the resource accounting procedures?

Mrs. Roche: No, I do not agree with it. I shall go on to discuss some of the points that the right hon. Gentleman made, because the Committee wants to hear about them.
The right hon. Member for Fareham (Sir P. Lloyd) and various others mentioned some of the points that were made in the report sponsored by the British Property Federation. It was a technical report and there is always great scope for different opinions, forecasts and analyses. I do not agree with all the conclusions reached in it.

Mr. Clifton-Brown: I think that I heard the Financial Secretary say that the cost of our amendment would be a staggering £800 million. Will she explain where she gets that figure, given that the Red Book shows that implementing the entire clause will raise only £270 million this year, £310 million next year and £340 million in 2001–02?

Mrs. Roche: Certainly. It is getting rather late for some hon. Members, but I say with the greatest respect—as I used to say ins another capacity—that the hon. Gentleman should listen to what I say. I was talking about his proposals for slab and slice, not the proposals in the amendment. I shall come a little later to the costs of that.
The right hon. Member for Fylde (Mr. Jack) said that, in his view, the Government had shifted the burden on to business. Both residential and commercial property deals will face exactly the same tax rate, which is why it is fair.


He also mentioned exemptions. The Conservative party has been going on for weeks and weeks about the Government introducing complexity in the tax system; yet Conservatives seek to introduce further complexity. The right hon. Gentleman gave us an interesting history lesson on how stamp duty was introduced. His speech amounted to an attack on stamp duty, but I note that, when he was a Treasury Minister—he held my post—he did nothing to abolish it. It is no good the right hon. Gentleman telling the Chamber, "It was nothing to do with me, guy; I was only the Financial Secretary."

Mr. Jack: Will the hon. Lady give way?

Mrs. Roche: No, I have already given way and I must make progress. [Interruption.]

The First Deputy Chairman: Order. Perhaps we could have less noise from the Treasury Bench. The only sound that I want to hear is from the Minister.

10 pm

Mrs. Roche: Thank you, Mr. Martin. That is the nicest thing that anyone has said to me all evening.
What would the amendment do? As I said, it would introduce considerable complexity into the administration of what is essentially a straightforward tax, the efficiency of which depends on a rapid turnover by the stamp office of a large number of documents. That was well pointed out in an excellent contribution by my hon. Friend the Member for Shipley (Mr. Leslie).
Once again, the Opposition have proposed a measure that would lead to greater complexity, and has not been costed. In answer to the hon. Member for Cotswold (Mr. Clifton-Brown), I say that the amendment would have a revenue cost of about £175 million. During the debate, the hon. Member for Maldon and East Chelmsford was asked whether he had costed the amendment, and he could not give an answer. The Opposition owe a duty to the Committee to say from where the money would come. No wonder they completely mismanaged the public finances.
Why should the voters listen to a party that no longer seems to know what it believes in on finance? Last summer, the shadow Chancellor denounced as "reckless" my right hon. Friend the Chancellor's £40 billion spending plans for health and education. This week, the shadow Chancellor promised that a Conservative Government "would adopt them". Those are not my words: I was quoting from the Daily Mail, so the Conservatives seem to have lost the confidence of another section of the press.
The amendment is neither desirable nor necessary. For the reasons I have given, I ask the Committee to reject it.

Mr. Gibb: Clause 99 introduces yet another rise in stamp duty rates in what the Prime Minister pretends is a tax-cutting Budget. It will raise £270 million this year, £310 million next year and £340 million the year after. That follows two previous Labour Budgets which increased stamp duty rates. The March 1998 Budget increases raised some £500 million a year in extra stamp duty revenues, and Labour's first Budget in July 1997 also

raised £500 million a year in extra stamp duty revenues. That is £1.3 billion of yearly extra stamp duty to be paid by the British people and British business as a result of electing a Labour Government to power in May 1997. The Government were elected on a clear pledge not to raise taxes. [Interruption.]

The First Deputy Chairman: Order. The Committee should come to order. It is bad manners. The hon. Gentleman should be heard.

Mr. Gibb: Thank you, Mr. Martin.
When the Chancellor first introduced his stamp duty escalator in July 1997, he gave house price stability as his reason for doing so. He said:
I will not allow house prices to get out of control".—[Official Report, 2 July 1997; Vol. 297, c. 313.]
However, house prices in the residential sector are rising, and the stamp duty increases are having little or no effect on prices. That is the view of residential property estate agents. Simon Tyler of Chase de Vere was quoted in The Sunday Times on 14 March. [Interruption.]

The First Deputy Chairman: Order. Hon. Members at the Bar should be quiet.

Mr. Gibb: I am grateful to you, Mr. Martin. Simon Tyler of Chase de Vere said:
Most people will add the cost to their mortgages so I shouldn't think it will affect the property market too much.
When the Chancellor introduced this latest tax hike, he said that 96 per cent. of home sales would be unaffected, implying that only richer households will be affected. However, it will affect a much wider section of society, because it will affect business—small business in particular. As the Association of British Insurers has said, the recent stamp duty increase
has been presented as affecting those in more expensive housing. It also applies to commercial and industrial property where it bites at a low level.
The effect is to increase costs for many start-up businesses discouraging would-be entrepreneurs and investors backing them.
The Institute of Directors has also criticised the rise. It says:
We deplore the increase in stamp duty on property transactions of over £250,000. It will affect only a small proportion of domestic properties, but a much larger proportion of business properties.
The institute goes on to make the important point that transfers of goodwill and patents will also be affected. Moreover, a written answer from the Economic Secretary to the Treasury, referred to by my right hon. Friend the Member for Fylde (Mr. Jack)—[Interruption.]

The First Deputy Chairman: Order. It is not good that the Chair should have to keep bringing the Committee to order; it is not fair on the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb).

Mr. Gibb: Thank you, Mr. Martin.
The answer from the Financial Secretary's colleague, the Economic Secretary, reveals that three quarters of the tax revenue from the 3.5 per cent. rate of stamp duty comes from commercial properties, while only a quarter comes from residential properties—a point that was


omitted from the Chancellor's speech and, incidentally, from this year's notes on clauses, although it was clearly set out in last year's. The candle burns late into the night at the Treasury so that people can excise such unhelpful paragraphs.
My hon. Friend the Member for Guildford (Mr. St. Aubyn) was right to point out that the 0.5 per cent. increase in stamp duty will knock billions of pounds off the value of Government property, while raising only a few hundred million pounds. That will be crucial when the Government introduced resource accounting. It will not just mean a paper transaction; it will determine tax and spending plans. My hon. Friend was also right to point out that the increase in stamp duty is a tax on mobility.
The hon. Member for Halton (Mr. Twigg) made a marvellous attack on the competence of Arthur Andersen, in connection with a report that he has not even read. Perhaps Arthur Andersen should consult the hon. Gentleman and take advantage of his expertise when it next produces a report. The hon. Member for South-East Cornwall (Mr. Breed), a former bank manager, expressed concern about the amount of secured borrowing: he thinks that business should reduce it. Well, he would, wouldn't he, being a former bank manager.
My right hon. Friend the Member for Fareham (Sir P. Lloyd) is right to demand clarity on the Government's medium-term intentions on the rate of stamp duty, and my right hon. Friend the Member for Fylde is right to be suspicious of Governments who change taxes without saying why. As my right hon. Friend pointed out, that must mean that the Government themselves believe the tax rise involved to be bad, and to be particularly bad for small businesses.
Firms are genuinely concerned about the extra cost that the clause will impose on dynamic business. It is yet another burden to add to the catalogue of additional burdens on business introduced by the Government since May 1997. What worries businesses particularly—as my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) and others have said—is where the future lies. What future stamp duty increases can we expect? Will McKee, director-general of the British Property Federation, said last year:
the real question is: where is the Chancellor going with stamp duty.
Steve Mallen, head of research at Knight Frank, said:
the shrewd investor"—
and there are shrewd investors sitting opposite me—
should assume stamp duty will continue to rise towards continental levels.
So what are the Government's intentions? The Minister should have given business some certainty and stability. She should have spelt out the Government's policy with regard to future stamp duty rates. Will the rates continue to rise, and, if so, to what level? Will they rise to the 12.5 per cent. to which they have risen in Belgium, to the 6 or 4.5 per cent. to which they have risen in France, to the 9 per cent. level reached in Greece, to the 6 per cent. level reached in Luxembourg, the Netherlands and Spain or to the 10 per cent. level reached in Portugal? If stamp duty rates are not to continue to rise, why has not the Minister given the same guarantee that the Chancellor has given regarding corporation tax rates—that there will be no further increases for the remainder of this Parliament?
In Labour's first three Budgets, we have seen three stamp duty rises. We have seen the rate increased from 1 to 2.5 and 3.5 per cent. As with all stealth tax rises, the effects of this are capricious and unplanned. The impact on residential properties is more severe—[Interruption.]

The First Deputy Chairman: Order. Again, I appeal to the Committee to come to order.

Mr. Gibb: Thank you, Mr. Martin.
Like all stealth taxes, the increase's effects will be capricious and unplanned. It will have a more severe impact on residential property in the south-east than elsewhere in the United Kingdom, and will hurt small businesses disproportionately more than large ones. If the Government are true to their rhetoric that the stamp duty increase is only about "cooling" the housing market, they should feel perfectly happy about accepting amendment No. 3, which would disapply the increase to business property. If they cannot accept the amendment, I urge the Committee to demonstrate its opposition to just another stealth tax by voting for the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 126, Noes 308.

Division No. 156]
[10.10 pm


AYES


Amess, David
Gorman, Mrs Teresa


Ancram, Rt Hon Michael
Gray, James


Arbuthnot, Rt Hon James
Green, Damian


Atkinson, Peter (Hexham)
Greenway, John


Baldry, Tony
Grieve, Dominic


Beggs, Roy
Gummer, Rt Hon John


Bercow, John
Hamilton, Rt Hon Sir Archie


Beresford, Sir Paul
Hammond, Philip


Bottomley, Rt Hon Mrs Virginia
Hawkins, Nick


Brady, Graham
Hayes, John


Brazier, Julian
Heald, Oliver


Browning, Mrs Angela
Heathcoat-Amory, Rt Hon David


Bruce, Ian (S Dorset)
Heseltine, Rt Hon Michael


Burns, Simon
Hogg, Rt Hon Douglas


Cash, William
Horam, John


Chope, Christopher
Howard, Rt Hon Michael


Clappison, James
Howarth, Gerald (Aldershot)


Clark, Dr Michael (Rayleigh)
Jack, Rt Hon Michael


Clarke, Rt Hon Kenneth
Jackson, Robert (Wantage)


(Rushcliffe)
Jenkin, Bernard


Clifton-Brown, Geoffrey
Key, Robert


Collins, Tim
Kirkbride, Miss Julie


Cormack, Sir Patrick
Laing, Mrs Eleanor


Cran, James
Lait, Mrs Jacqui


Davies, Quentin (Grantham)
Lansley, Andrew


Davis, Rt Hon David (Haltemprice
Leigh, Edward


& Howden)
Letwin, Oliver


Donaldson, Jeffrey
Lewis, Dr Julian (New Forest E)


Dorrell, Rt Hon Stephen
Lilley, Rt Hon Peter


Duncan, Alan
Lloyd, Rt Hon Sir Peter (Fareham)


Duncan Smith, Iain
Lyell, Rt Hon Sir Nicholas


Emery, Rt Hon Sir Peter
MacGregor, Rt Hon John


Evans, Nigel
McIntosh, Miss Anne


Fabricant, Michael
MacKay, Rt Hon Andrew


Fallon, Michael
McLoughlin, Patrick


Flight, Howard
Maples, John


Forsythe, Clifford
Mates, Michael


Forth, Rt Hon Eric
Mawhinney, Rt Hon Sir Brian


Fraser, Christopher
May, Mrs Theresa


Gale, Roger
Moss, Malcolm


Garnier, Edward
Nicholls, Patrick


Gibb, Nick
Norman, Archie


Gill, Christopher
Ottaway, Richard






Paice, James
Tapsell, Sir Peter


Paterson, Owen
Taylor, John M(Solihull)


Pickles, Eric
Taylor, Sir Teddy


Prior, David
Thompson, William


Randall, John
Tredinnick, David


Redwood, Rt Hon John
Trend, Michael


Roberston, Laurence (Tewk'b'ry)
Viggers, Peter


Roe, Mrs Marion Broxbourne)
Walter, Robert


Ross, William (E Lond'y)
Wardle, Charles


Ruffley, David
Waterson, Nigel


St Aubyn, Nick
Whitney, Sir Raymond


Sayeed, Jonathan
Whittingdale, John


Shepherd, Richard
Wilkinson, John


Simpson, Keith (Mid-Norfolk)
Willetts, David


Smyth, Rev Martin (Belfast S)
Winterton, Mrs Ann (Congleton)


Soames, Nicholas
Winterton, Nicholas (Macclesfield)


Spicer, Sir Michael
Woodward, Shaun


Spring, Richard
Yeo, Tim


Stanley, Rt Hon Sir John
Young, Rt Hon Sir George


Steen, Anthony



Streeter, Gary
Tellers for the Ayes:


Swayne, Desmond
Mrs. Caroline Spelman and


Syms, Robert
Sir David Madel.




NOES


Adams, Mrs Irene (Paisley N)
Chaytor, David


Ainsworth, Robert (Cov'try NE)
Chidgey, David


Allan, Richard
Clapham, Michael


Allen, Graham
Clark, Rt Hon Dr David (S Shields)


Anderson, Donald (Swansea E)
Clark, Paul (Gillingham)


Armstrong, Rt Hon Ms Hilary
Clarke, Eric (Midlothain)


Ashdown, Rt Hon Paddy
Clarke, Rt Hon Tom (Coatbrige)


Ashton, Joe
Clarke, Tony (Northampton S)


Atkins, Charlotte
Clelland, David


Austin, John
Cohen, Harry


Baker, Norman
Coleman, Iain


Ballard, Jackie
Connarty, Michael


Barnes, Harry
Corbett, Robin


Battle, John
Corbyn, Jeremy


Beard, Nigel
Corston, Ms Jean


Beckett, Rt Hon Mrs Margaret
Cotter, Brain


Begg, Miss Anne
Cousins, Jim


Bell, Staurt (Middlesbrough)
Crausby, David


Benn, Rt Hon Tony
Cryer, John (Hornchurch)


Bennett, Andrew F
Cummings, John


Benton, Joe
Cunningham, Rt Hon Dr Jack


Bermingham, Gerald
(Copeland)


Best, Harold
Cunnigham, Jim (Cov'try S)


Betts, Clive
Curtis-Thomas, Mrs Claire


Blears, Ms Hazel
Dalyell, Tam


Blizzard, Bob
Darvill, Keith


Blunkett, Rt Hon David
Davey, Edward (Kingston)


Boateng, Paul
Davey, Valerie (Bristol W)


Borrow, David
Davidson, Ian


Bradley, Keith (Withington)
Davies, Rt Hon Denzil (Llanelli)


Bradley, Peter (The Wrekin)
Davies, Geraint (Croydon C)


Bradshaw, Ben
Dawson, Hilton


Breed, Colin
Dean, Mrs Janet


Brinton, Mrs Helen
Dismore, Andrew


Buck, Ms Karen
Dobbin, Jim


Burgon, Colin
Dobson, Rt Hon Frank


Burnett, John
Donohoe, Brain H


Butler, Mrs Christine
Doran, Frank


Caborn, Rt Hon Richard
Dowd, Jim


Campbell, Alan (Tynemouth)
Drown, Ms Julia


Campbell, Mrs Anne (C'bridge)
Dunwoody, Mrs Gwyneth


Campbell, Rt Hon Menzies
Eagle, Angela (Wallasey)


(Ne Fife)
Eagle, Maria (L'Pool Garston)


Campbell, Ronnie (Blyth V)
Edwards, Huw


Campbell-Savours, Dale
Efford, Clive


Cann, Jamie
Ennis, Jeff


Caplin, Ivor
Fearn, Ronnie


Casale, Roger
Field, Rt Hon Frank


Caton, Martin
Fitzsimons, Lorna


Cawsey, Ian
Foster, Rt Hon Derek


Chapman, Ben (Wirral S)
Foster, Don (Bath)





Foster, Michael Jabez (Hastings)
Levitt, Tom


Galloway, George
Lewis, Ivan (Bury S)


Gapes, Mike
Lewis, Terry (Worsley)


Gardiner, Barry
Linton, Martin


George, Bruce(Walsall S)
Livingstone, Ken


Gerrard, Neil
Lloyd, Tony (Manchester C)


Gibson, Dr Ian
Llwyd, Elfyn


Gilroy, Mrs Linda
Lock, David


Godsiff, Roger
Love, Andrew


Goggins, Paul
McAvoy, Thomas


Golding, Mrs Llin
McCartney, Rt Hon Ian


Gordon, Mrs Eileen
(Makerfield)


Griffiths, Jane (Reading E)
McDonagh, Siobhain


Griffiths, Nigel (Edinburgh S)
McDonnell, John


Griffiths, Win (Bridgend)
McFall, John


Grocott, Bruce
McIsaac, Shona


Gunnell, John
McKenna, Mrs Rosemary


Hall, Mike (Weaver Vale)
Mackinlay, Andrew


Hall, Patrick (Bedford)
MacShane, Denis


Harman, Rt Hon Ms Harriet
Mactaggart, Fiona


Harris, Dr Evan
McWalter, Tony


Harvey, Nick
Mahon, Mrs Alice


Heal, Mrs Sylvia
Mallaber, Judy


Healey, John
Mandelson, Rt Hon Peter


Health, David (Somerton & Frome)
Marsden, Gordon (Blackpool S)


Henderson, Doug (Newcastle N)
Marsden, Paul (Shrewsbury)


Henderson, Ivan (Harwich)
Marshall, David (Shettleston)


Hepburn, Stephen
Marshall-Andrews, Robert


Heppell, John
Martlew, Eric


Hesford, Stephen
Maxton, John


Hewitt, Ms Patricia
Meacher, Rt Hon Michael


Hinchliffe, David
Meale, Alan


Hodge, Ms Margaret
Merron, Gillian


Hood, Jimmy
Michie, Bill (Shef'ld Heeley)


Hoon, Geoffrey
Milburn, Rt Hon Alan


Hope, Phil
Miller, Andrew


Hopkins, Kelvin
Moffatt, Laura


Howarth, Alan (Newport E)
Moonie, Dr Lewis


Howarth, George (Knowsley N)
Moran, Ms Margaret


Howells, Dr Kim
Morley, Elliot


Hoyle, Lindsay
Morris, Ms Estelle (B'ham Yardley)


Humble, Mrs Joan
Mountford, Kali


Hurst, Alan
Mudie, George


Hutton, John
Mullin, Chris


Iddon, Dr Brain
Murphy, Denis (Wansbeck)


Illsley, Eric
Murphy, Rt Hon Paul (Torfaen)


Ingram, Rt Hon Adam
Naysmith, Dr Doug


Jackson, Ms Glenda (Hampstead)
Oaten, Mark


Jackson, Helen (Hillsborough)
O'Brein, Bill (Normanton)


Jamieson, David
O'Neill, Martin


Jenkins, Brain
Öpik, Lembit


Johnson, Alan (Hull W & Hessle)
Palmer, Dr Nick


Johnson, Miss Melanie
Pearson, Ian


(Welwyn Hatfield)
Pendry, Tom


Jones, Barry (Alyn & Deeside)
Pertham, Ms Linda


Jones, Helen (Warrington N)
Pickthall, Colin


Jones, Dr Lynne (Selly Oak)
Pike, Peter L


Jones, Martyn (Clwyd S)
Plaskitt, James


Jowell, Rt Hon Ms Tessa
Pollard, Kerry


Keen, Alan (Feltham & Heston)
Pond, Chris


Keen, Ann (Brentford & Isleworth)
Pope, Greg


Keetch, Paul
Pound, Stephen


Kelly, Ms Ruth
Powell, Sir Raymond


Kemp, Fraser
Prentice, Ms Bridget (Lewisham E)


Kennedy, Jane (Wavertree)
Prentice, Gordon (Pendle)


Kidney, David
Prescott, Rt Hon John


Kilfoyle, Peter
Primarolo, Dawn


King, Andy (Rugby & Kenilworth)
Purchase, Ken


King, Ms Oona (Bethnal Green)
Quin, Rt Hon Ms Joyce


Kirkwood, Archy
Quinn, Lawrie


Kumar, Dr Ashok
Radice, Giles


Ladyman, Dr Stephen
Reed, Andrew (Loughborough)


Lawrence, Ms Jackie
Reid, Rt Hon Dr John (Hamilton N)


Laxton, Bob
Rendel, David


Lepper, David
Roche, Mrs Barbara


Leslie, Christopher
Ross, Ernie (Dundee W)






Rowlands, Ted
Temple-Morris, Peter


Roy, Frank
Thomas, Gareth (Clwyd W)


Ruddock, Joan
Thomas, Gareth R (Harrow W)


Russell, Bob (Colchester)
Timms, Stephen


Ryan, Ms Joan
Tipping, Paddy


Salter, Martin
Trickett, Jon


Sarwar, Mohammad
Turner, Dennis (Wolverh'ton SE)


Savidge, Malcolm
Turner, Dr Desmond (Kemptown)


Sedgemore, Brian
Turner, Dr George (NW Norfolk)


Shaw, Jonathan
Twigg, Derek (Halton)


Sheldon, Rt Hon Robert
Twigg, Stephen (Enfield)


Shipley, Ms Debra
Tyler, Paul


Simpson, Alan (Nottingham S)
Walley, Ms Joan


Singh, Marsha
Ward, Ms Claire


Smith, Rt Hon Andrew (Oxford E)
Wareing, Robert N


Smith, Angela (Basildon)
Webb, Steve


Smith, Jacqui (Redditch)
Whitehead, Dr Alan


Soley, Clive
Wicks, Malcolm


Spellar, John
Williams, Rt Hon Alan


Squire, Ms Rachel
(Swansea W)


Steinberg, Gerry
Williams, Alan W (E Carmarthen)


Stevenson, George
Williams, Mrs Betty (Convey)


Stott, Roger
Willis, Phil


Strang, Rt Hon Dr Gavin
Wills, Michael


Stringer, Graham
Winnick, David


Stuart, Ms Gisela
Wise, Audrey


Stunell, Andrew
Wood, Mike


Sutcliffe, Gerry
Wright, Anthony D (Gt Yarmouth)


Taylor, Rt Hon Mrs Ann



(Dewsbury)
Tellers for the Noes:


Taylor, Ms Dart (Stockton S)
Mr. Keith Hill and


Taylor, Matthew (Truro)
Mr. Kevin Hughes.

Question accordingly negatived.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 305, Noes 127.

Division No.157]
[10.26 pm


AYES


Adams, Mrs Irene (Paisley N)
Burgon, Colin


Ainsworth, Robert(Cov'try NE)
Burnett, John


Allan, Richard
Butler, Mrs Christine


Allen, Graham
Cable, Dr Vincent


Anderson, Donald (Swansea E)
Campbell, Alan (Tynemouth)


Anderson, Janet (Rossendale)
Campbell, Mrs Anne (C'bridge)


Armstrong, Rt Hon Ms Hilary
Campbell, Rt Hon Menzies


Ashdown, Rt Hon Paddy
(NE Fife)


Ashton, Joe
Campbell, Ronnie (Blyth V)


Atkins, Charlotte
Campbell-Savours, Dale


Austin, John
Cann, Jamie


Ballard, Jackie
Caplin, Ivor


Barnes, Harry
Casale, Roger


Battle, John
Caton, Martin


Beard, Nigel
Cawsey, Ian


Beckett, Rt Hon Mrs Margaret
Chapman, Ben (Wirral S)


Begg, Miss Anne
Chaytor, David


Bell, Stuart(Middlesbrough)
Chidgey, David


Benn, Rt Hon Tony
Clapham, Michael


Bennett, Andrew F
Clark, Rt Hon Dr David (S Shields)


Benton, Joe
Clark, Paul (Gillingham)


Bermingham, Gerald
Clarke, Eric (Midlothain)


Best, Harold
Clarke, Rt Hon Tom (Coatbridge)


Betts, Clive
Clarke, Tony (Northampton S)


Blears, Ms Hazel
Clelland, David


Blizzard, Bob
Cohen, Harry


Boateng, Paul
Coleman, Iain


Borrow, David
Connarty, Michael


Bradley, Keith (Withington)
Corbett, Robin


Bradley, Peter (The Wrekin)
Corbyn, Jeremy


Bradshaw, Ben
Corston, Ms Jean


Breed, Colin
Cotter, Brain


Brinton, Mrs Helen
Cousins, Jim


Buck, Ms Karen
Crausby, David





Cryer, John (Hornchurch)
Hutton, John


Cummings, John
Iddon, Dr Brain


Cunningham, Rt Hon Dr Jack
Illsley, Eric


(Copeland)
Ingram, Rt Hon Adam


Cunningham, Jim (Cov'try S)
Jackson, Ms Glenda (Hampstead)


Curtis-Thomas, Mrs Claire
Jackson, Helen (Hillsborough)


Dalyell, Tam
Jamieson, David


Darvill, Keith
Jenkins, Brian


Davey, Edward (Kingston)
Johnson, Alan (Hull W & Hessle)


Davey, Valerie(Bristol W)
Johnson, Miss Melanie


Davidson, Ian
(Welwyn Hatfield)


Davies, Rt Hon Denzil (Llanelli)
Jones, Barry (Alyn & Deeside)


Davies, Geraint (Croydon C)
Jones, Helen (Warrington N)


Dawson, Hilton
Jones, Dr Lynne (Selly Oak)


Dean, Ms Janet
Jones, Martyn (Clwyd S)


Dismore, Andrew
Jowell, Rt Hon Ms Tessa


Dobbin, Jim
Keen, Alan (Feltham & Heston)


Dobson, Rt Hon Frank
Keen, Ann (Brentford & Isleworth)


Donohoe, Brain H
Keetch, Paul


Doran, Frank
Kelly, Ms Ruth


Dowd, Jim
Kemp, Fraser


Drown, Ms Julia
Kennedy, Jane (Wavertree)


Dunwoody, Mrs Gwyneth
Kidney, David


Eagle, Angela (Wallasey)
Kilfoyle, Peter


Eagle, Maria(L'Pool Garston)
King, Andy (Rugby & Kenilworth)


Edwards, Huw
King, Ms Oona (Bethnal Green)


Efford, Clive
Kirkwood, Archy


Ennis, Jeff
Kumar, Dr Ashok


Fearn, Ronnie
Ladyman, Dr Stephen


Field, Rt Hon Frank
Lawrence, Ms Jackie


Fitzsimons, Lorna
Laxton, Bob


Foster, Rt Hon Derek
Lepper, David


Foster, Don (Bath)
Leslie, Christopher


Foster, Michael Jabez (Hastings)
Levitt, Tom


Galloway, George
Lewis, Ivan (Bury S)


Gapes, Mike
Lewis, Terry (Worsley)


Gardiner, Barry
Linton, Martin


George, Bruce (Walsall S)
Livingstone, Ken


Gerrard, Neil
Lloyd, Tony (Manchester C)


Gibson, Dr Ian
Llwyd, Elfyn


Gilroy, Mrs Linda
Lock, David


Godsiff, Roger
Love, Andrew


Goggins, Paul
McAvoy, Thomas


Golding, Mrs Llin
McCartney, Rt Hon Ian


Gordon, Mrs Eileen
(Makerfield)


Griffiths, Jane (Reading E)
McDonagh, Siobhain


Griffiths, Nigel (Edinburgh S)
McDonnell, John


Griffiths, Win (Bridgend)
McFall, John


Grocott, Bruce
McIsaac, Shona


Gunnell, John
McKenna, Mrs Rosemary


Hall, Mike (Weaver Vale)
Mackinlay, Andrew


Hall, Patrick (Bedford)
MacShane, Denis


Harman, Rt Hon Ms Harriet
Mactaggart, Fiona


Harris, Dr Evan
McWalter, Tony


Harvey, Nick
Mahon, Mrs Alice


Heal, Mrs Sylvia
Mallaber, Judy


Healey, John
Mandelson, Rt Hon Peter


Heath, David (Somerton & Frome)
Marsden, Gordon (Blackpool S)


Henderson, Doug (Newcastle N)
Marsden, Paul (Shrewsbury)


Henderson, Ivan (Harwich)
Marshall, David (Shettleston)


Hepburn, Stephen
Marshall-Andrews, Robert


Heppell, John
Martlew, Eric


Hesford, Stephen
Maxton, John


Hewitt, Ms Patricia
Meacher, Rt Hon Michael


Hinchliffe, David
Meale, Alan


Hodge, Ms Margaret
Merron, Gillian


Hood, Jimmy
Michie, Bill (Shef'ld Heeley)


Hoon, Geoffrey
Milburn, Rt Hon Alan


Hope, Phil
Miller, Andrew


Hopkins, Kelvin
Moffatt, Laura


Howarth, Alan (Newport E)
Moonie, Dr Lewis


Howells, Dr Kim
Morley, Elliot


Hoyle, Lindsay
Morris, Ms Estelle (B'ham Yardley)


Humble, Mrs Joan
Mountford, Kali


Hurst, Alan
Mudie, George






Mullin, Chris
Smith, Jacqui (Redditch)


Murphy, Denis (Wansbeck)
Soley, Clive


Murphy, Rt Hon Paul (Torfaen)
Spellar, John


Naysmith, Dr Doug
Squire, Ms Rachel


Oaten, Mark
Steinberg, Gerry


O'Brien, Bill (Normanton)
Stevenson, George


O'Neill, Martin
Stott, Roger


Öpik, Lembit
Strang, Rt Hon Dr Gavin


Palmer, Dr Nick
Stringer, Graham


Pearson, Ian
Stuart, Ms Gisela


Pendry, Tom
Stunell, Andrew


Perham, Ms Linda
Sutcliffe, Gerry


Pickthall, Colin
Taylor, Rt Hon Mrs Ann


Pike, Peter L
(Dewsbury)


Plaskitt, James
Taylor, Ms Dari (Stockton S)


Pollard, Kerry
Taylor, Matthew (Truro)


Pond, Chris
Temple-Morris, Peter


Pope, Greg
Thomas, Gareth (Clwyd W)


Pound, Stephen
Thomas, Gareth R (Harrow W)


Powell, Sir Raymond
Timms, Stephen


Prentice, Ms Bridget (Lewisham E)
Tipping, Paddy


Prentice, Gordon (Pendle)
Trickett, Jon


Prescott, Rt Hon John
Turner, Dennis (Wolverh'ton SE)


Primarolo, Dawn
Turner, Dr Desmond (Kemptown)


Purchase, Ken
Turner, Dr George (NW Norfolk)


Quin, Rt Hon Ms Joyce
Twigg, Derek (Halton)


Quinn, Lawrie
Twigg, Stephen (Enfield)


Radice, Giles
Tyler, Paul


Reed, Andrew(Loughborough)
Vaz, Keith


Reid, Rt Hon Dr John (Hamilton N)
Walley, Ms Joan


Rendel, David
Ward, Ms Claire


Roche, Mrs Barbara
Wareing, Robert N


Ross, Ernie (Dundee W)
Whitehead, Dr Alan


Rowlands, Ted
Wicks, Malcolm


Roy, Frank
Williams, Rt Hon Alan


Ruddock, Joan
(Swansea W)


Russell, Bob (Colchester)
Williams, Alan W (E Carmarthen)


Ryan, Ms Joan
Williams, Mrs Betty (Conwy)


Salter, Martin
Willis, Phil


Savidge, Malcolm
Wills, Michael


Sedgemore, Brian
Winnick, David


Shaw, Jonathan
Wise, Audrey


Shipley, Ms Debra
Wood, Mike


Simpson, Alan (Nottingham S)
Wright, Anthony D (Gt Yarmouth)


Singh, Marsha
Tellers for the Ayes:


Smith, Rt Hon Andrew (Oxford E)
Mr. Keith Hill and


Smith, Angela (Basildon)
Mr. Kevin Hughes.




NOES


Amess, David
Cash, William


Ancram, Rt Hon Michael
Chope, Christopher


Arbuthnot, Rt Hon James
Clappison, James


Atkinson, Peter(Hexham)
Clark, Dr Michael(Rayleigh)


Baldry, Tony
Clarke, Rt Hon Kenneth


Beggs, Roy
(Rushcliffe)


Bercow, John
Clifton-Brown,Geoffrey


Beresford, Sir Paul
Collins, Tim


Bottomley, Rt Hon Mrs Virginia
Cormack, Sir Patrick


Brady, Graham
Cran, James


Brazier, Julian
Davies, Quentin (Grantham)


Browning, Mrs Angela
Davis, Rt Hon David (Haltemprice


Bruce, Ian (S Dorset)
& Howden)


Burns, Simon
Donaldson, Jeffery





Dorrell, Rt Hon Stephen
Maude, Rt Hon Francis


Duncan, Alan
Mawhinney, Rt Hon sir Brian


Duncan Smith, Iain
May, Mrs Theresa


Emery, Rt Hon Sir Peter
Moss, Malcolm


Evans, Nigel
Nicholls, Patrick


Fabricant, Michael
Norman, Archie


Fallon, Michael
Ottaway, Richard


Flight, Howard
Paice, James


Forsythe, Clifford
Paterson, Owen


Forth, Rt Hon Eric
Pickles, Eric


Fraser, Christopher
Prior, David


Gale, Roger
Randall, John


Garnier, Edward
Redwood, Rt Hon John


Gibb, Nick
Robertson, Laurence (Tewk'b'ry)


Gill, Christopher
Roe, Mrs Marion (Broxbourne)


Gorman, Mrs Teresa
Ross, William (E Lond'y)


Gray, James
Ruffley, David


Green, Damian
St Aubyn, Nick


Greenway, John
Sayeed, Jonathan


Grieve, Dominic
Shepherd, Richard


Gummer, Rt Hon John
Simpson, Keith (Mid-Norfolk)


Hamilton, Rt Hon Sir Archie
Smyth, Rev Martin (Belfast S)


Hammond, Philip
Soames, Nicholas


Hawkins, Nick
Spicer, Sir Michael


Hayes, John
Spring, Richard


Heald, Oliver
Stanley, Rt Hon Sir John


Heathcoat-Amory, Rt Hon David
Steen, Anthony


Heseltine, Rt Hon Michael
Streeter, Gary


Hogg, Rt Hon Douglas
Swayne, Desmond


Horam, John
Syms, Robert


Howard, Rt Hon Michael
Tapsell, Sir Peter


Howarth, Gerald (Aldershot)
Taylor, John M (Solihull)


Jack, Rt Hon Michael
Taylor, Sir Teddy


Jackson, Robert (Wantage)
Thompson, William


Jenkin, Bernard
Trend, Michael


Key, Robert
Viggers, Peter


Kirkbride, Miss Julie
Walter, Robert


Laing, Mrs Eleanor
Wardle, Charles


Lait, Mrs Jacqui
Waterson, Nigel


Lansley, Andrew
Whitney, Sir Raymond


Leigh, Edward
Whittingdale, John


Letwin, Oliver
Wilkinson, John


Lewis, Dr Julian (New Forest E)
Willetts, David


Lilley, Rt Hon Peter
Winterton, Mrs Ann (Congleton


Lloyd, Rt Hon Sir Peter (Fareham)
Winterton, Nicholas (Macclesfield)


Lyell, Rt Hon Sir Nicholas
Woodward, Shaun


MacGregor, Rt Hon John
Yeo, Tim


McIntosh, Miss Anne
Young, Rt Hon Sir George


MacKay, Rt Hon Andrew



McLoughlin, Patrick
Tellers for the Noes:


Maples, John
Mrs. Caroline Spelman and


Mates, Michael
Sir David Madel.

Question accordingly agreed to.

Clause 99 ordered to stand part of the Bill.

Bill (Clauses 2, 28 and 99) reported, without amendment; to lie upon the Table.

Ordered,

That, during the proceedings on the Finance Bill, the Standing Committee on the Bill shall have leave to sit twice on the first day on which it shall meet.—[Mr. Robert Ainsworth.]

Orders of the Day — DELEGATED LEGISLATION

Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.

EDUCATION

Ordered,
That the Education (Budget Statements and Supplementary Provisions) Regulations 1999 be referred to a Standing Committee on Delegated Legislation.
That the Education (Education Standards Etc. Grants) (England) Regulations 1999 be referred to a Standing Committee on Delegated Legislation.
That the Education (School Organisation Committees) (England) Regulations 1999 be referred to a Standing Committee on Delegated Legislation.
That the Education (School Organisation Plans) (England) Regulations 1999 be referred to a Standing Committee on Delegated Legislation.
That the Education (Transition to New Framework) (School Organisation Proposals) Regulations 1999 be referred to a Standing Committee on Delegated Legislation.—[Mr. Robert Ainsworth.]

Orders of the Day — Rail Freight Noise

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]

Mr. Graham Brady: I am grateful for the opportunity to raise a matter of considerable importance to many of my constituents and to many other people throughout the country. I am glad to see the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Hampstead and Highgate (Ms Jackson), in the Chamber at this hour. I have always found her to be courteous and helpful in previous exchanges in the House. In her previous profession, the B-movie probably preceded the main business in the cinema but, on this occasion, the B-movie is coming after the main business considered by the House. None the less, although it may be a B-movie for those hon. Members who are leaving the Chamber, it is a matter of the greatest concern to many people.
My interest in raising this matter lies in the fact that I am strongly in favour of the movement of freight by rail. It is of great environmental benefit. I have a non-pecuniary interest in that I am co-chairman of the all-party rail freight group. I hope that that demonstrates my credentials as someone who is pleased to see the success of the rail freight industry. I am pleased about the enormous growth in rail freight that has taken place since the privatisation of the railways. That is most welcome.
In the short time available for the debate, I shall concentrate on some slightly more negative points connected with rail freight, but I hope that, in doing so, I shall address them constructively. Only if proper attention is paid to the environmental difficulties that can be caused by rail freight for those who live closest to rail freight facilities can the necessary expansion of rail freight take place in a way that will benefit our country and bring overall benefits to the environment. There can be enormous environmental dividends, but only if the industry is fair to its neighbours.
I have stated my own broad support for the expansion of rail freight, but, in raising the real and reasonable concerns of hundreds of families in my constituency who are affected by problems of noise and vibration from such freight movements, I am especially keen to acquit them of the charge of nimbyism. I allude to the particular problem caused by the transport, daily, of large quantities of limestone from quarries in Buxton to the Brunner Mond chemical plant in Northwich. I note that the hon. Member for Weaver Vale (Mr. Hall) is in the Chamber, although I am not sure in which capacity. I presume that he is here because of his constituency interest in the matter.
Freight from Buxton flows, by a slightly odd circuitous route, through the constituencies of Hazel Grove; Altrincham and Sale, West; Tatton; and Weaver Vale. I have had cause to be grateful to my parliamentary neighbour the hon. Member for Tatton (Mr. Bell) for his support and assistance.
This evening, I am pleased to have the coincidental support of the Environment, Transport and Regional Affairs Select Committee, which today published its report on the integrated transport White Paper. I am sure


that the Minister will have been reading the report all day and that she will be familiar with its contents. She will have noted that paragraph 164 states:
Despite the wider environmental benefits of an increase in rail freight, there are likely to be disadvantages, in some cases severe, for people living close to railway lines. It will be necessary, therefore, for improvements in rolling stock and track technology to be exploited to the full in order to minimise the noise and other environmental impacts generated by freight trains.
It is a coincidence that that report has been published on the same day as my Adjournment debate takes place, but I am pleased to have the Committee's clear support. We need to accept that a balance must be struck between the overall environmental benefits of carrying freight by rail and the severe difficulties that can be suffered by those who live closest to rail freight facilities.
As I said, I am keen to acquit my constituents of any charge of nimbyism because the flow of freight has gone on for decades. The railway line in question runs adjacent to the playing field of my old school, and I remember watching the wagons of long trains pass during the day. However, the flow of trains laden with limestone continues at night, and that became a significant problem towards the end of 1997, when the wagons were replaced.
On 10 February 1998, the freight operator, English, Welsh and Scottish Railways, sent a constituent of mine a letter which stated:
The way the wagon is made and its running characteristics does induce more noise and vibration".
It is clear and it is accepted by all the parties involved—by Brunner Mond, the customer, EWS, the carrier, and Railtrack, the operator of the track infrastructure—that the problem is a relatively new one. Although everyone accepts that the provision of limestone to the Brunner Mond plant is essential to the conduct of its business, all the parties to the affair recognise that there has been an increase in the noise and vibration nuisance generated by that necessary flow of freight.
It is important to recognise that, in densely populated residential areas—such as Timperley and Hale in my constituency, where the railway lines runs very near to some residential properties—it is only acceptable for freight flows to continue if maximum efforts are made to mitigate the environmental nuisance that they cause. Although I accept that none of the companies involved has acted deliberately, in the case that I describe, far from being mitigated, the environmental nuisance has been increased unnecessarily by a change in the technology employed.
As I said, the problem affects hundreds of families in my constituency, and I shall allude to a few of them. Mr. Wilson wrote to me to say that he is
woken at 5 in the morning to vibrations which make my whole house shake".
He adds that the vibrations must register five on the Richter scale, which might be a slight exaggeration, but I am sure that, in the small hours, the vibrations feel all too real to sufferers. Mr. Carr, who has lived in the area for three and a half years, wrote to me saying that, although the 4 am train used to pass virtually unnoticed,
Last night four trains came by between 4 and 6.30 am.
These people have been woken repeatedly, night after night, in the small hours. They are suffering a real loss in their standard of living and are very concerned about potential damage to their properties.
I should note at this point that Railtrack has attempted to help by commissioning some studies of the vibration levels involved. Preliminary reports suggest that the level of vibration, although clearly noticeable to those who live near the railway line, is not sufficient to cause structural damage to properties. That may be so, but it is definitely sufficient to cause major disruption to the lives of many of my constituents. They are losing sleep and remain concerned about structural damage to their houses. The problem must be tackled even if their properties are not in immediate danger.
Steps are being taken to improve the situation. The Minister will be aware that this is the third time that I have raised the matter in the House. I previously asked questions of Ministers at the relevant times and this is my first Adjournment debate on the subject. I have also written to Ministers outlining my concerns and those of my constituents. The responses have always been helpful, but ministerial replies have improved in recent months as there is increasing recognition that this is a real problem that must be addressed. In her letter to me of 8 April 1998, the Minister wrote:
Such is the demand for railfreight wagons, due to the increased carriage of goods by rail, that in this case the customer was not able to hire quieter wagons. EWS can only run trains to meet the requirements of their customers and at times when Railtrack can allocate train paths so, as in this case, freight trains tend to operate through the night, leaving the tracks free during the day for passenger traffic.
The Minister makes a perfectly reasonable observation, but the tone of her letter fails to acknowledge the real difficulties that people face in their daily lives. I am pleased to see appreciation of this problem increasing. A representative of EWS also wrote to me on 8 April 1998 and that letter contains the simple statement:
At present I don't believe there are any further steps we can take to improve the situation".
However, there have been a considerable number of suggestions about the way to proceed.
My purpose in initiating this debate is to try to focus on what can be done practically to help my constituents and those of neighbouring Members of Parliament who are suffering as a result of this problem. The tone of the responses from Railtrack, Brunner Mond and EWS is always helpful. They make it clear that they are exploring ways of ameliorating the problem—for example, they are considering altering the speed of the trains, which may improve the situation. I am told that they are investigating the possibility of improving the track with continually welded sections, which may reduce the noise and vibration. I also understand that Brunner Mond, with the support of EWS, has applied to the Department of the Environment, Transport and the Regions for a freight facilities grant in the hope that the design of its wagons can be improved and the company can introduce a "track friendly" wagon—to use its phrase.
I know that the DETR is considering this matter, and I do not expect the Minister to give me an answer about the freight facilities grant tonight. I would like to impress on her, however, that, although this problem is of immediate concern only to a few hundred families in my constituency—more widely, perhaps, it concerns a few thousand families—it has a much wider impact because rail freight is rapidly expanding. As I have said, I welcome that and I believe that it can bring environmental benefits, but Ministers should now understand and accept


that that expansion should continue only where it mitigates environmental problems for neighbouring residents.
The Department must help my constituents not only because it is right to help those who are suffering an unnecessary burden of nuisance and distress that has, for no good reason, increased in the past couple of years, but because this is a matter of public policy. If we are to achieve the ends that both the Minister and I desire, the problem must be tackled now, and it is only by recognising its wider implications that the future of the rail freight industry can be secured.
I ask the Minister and her colleagues to continue to work with the parties, as the Department has done at various times in the past few months, towards early mitigation of the problem. It has been suggested that, if we get a freight facilities grant, there might be improvements in rolling stock on that line early in 2000. That would be welcome, but my constituents cannot tolerate a deadline that constantly shifts backwards. It is essential that the Minister investigates the problem immediately and continues to be involved in pressing the parties to find a solution as quickly as possible.
I am not alone in having expressed these concerns. My hon. Friend the Member for Guildford (Mr. St. Aubyn), who is present, secured his own Adjournment debate on the problems of his constituents a few months ago. Only by dealing with those problems can we achieve the environmental outcomes that we all desire.
I am sure that the Minister understands the importance of improving the quality of life of my constituents, and that she will want to achieve that improvement. I hope that she will also recognise the wider public policy consideration that the problem must be solved in the interests of striking a fair balance between the rail freight industry and those who live next to it, so that we can make progress towards a sound environmental outcome. I look forward to hearing what I hope will be words of comfort from the Minister.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I congratulate the hon. Member for Altrincham and Sale, West (Mr. Brady) on securing this debate. Not only are the issues important to his constituents but, as he rightly said, they have a much wider importance. Constituency concerns, however, are always the main feature of these debates, whatever the hour of showing. My hon. Friend the Member for Weaver Vale (Mr. Hall) has been active on behalf of his constituents in attempting to secure a solution to this problem.
I am delighted to hear that the hon. Gentleman shares the Government's wish to encourage the movement of more freight by rail. It is a key part of our integrated transport strategy, and we have taken a number of initiatives in support of this policy. Indeed, after coming into office, we took immediate steps by improving the freight facilities grants scheme: cutting the red tape and doubling the grant spent in our first year.
Over the past two years, grants totalling £60 million have been awarded, and we have made it clear in our White Paper that more funds will be available over the next three years, if the demand is there.
At the national level, we shall also look to the Strategic Rail Authority to promote transport of freight by rail, establish rail freight targets and ensure that the network has sufficient capacity for freight as well as for the growth in passenger movements.
To establish the local context, we are in the process of revising our planning guidance to promote rail freight options, by introducing the expectation that local authorities will consider and protect opportunities for rail connections to industrial sites.
All that provides evidence of our long-term commitment to rail freight. We are delighted—as is the hon. Member for Altrincham and Sale, West—by the 12 per cent. growth in freight tonne kilometres on the railways during 1997-98, and by the continuation of that growth into the last financial year. We welcome its contribution to easing congestion on our roads, and the overall environmental benefits of less air pollution. Yet I appreciate that, for those who live close to a railway line, the noise from trains can affect the quality of everyday life. We may become accustomed to trains rumbling in the background during the day, but train movements during the night can be especially disruptive. Moreover, freight trains tend to operate during night hours, when the lines are not in use by passenger trains.
The statutory position is that householders affected by noise from new railway lines or where an existing railway is widened by laying additional track are entitled to noise compensation and amelioration measures. The same provision applies. However, there is no provision for compensation or abatement measures when use of a railway line intensifies.
Train operators and Railtrack are subject to the statutory nuisance provisions of the Environmental Protection Act 1990, which are in enforced by district councils. Under section 79 of that Act, it is the duty of district councils upon an occasion to inspect their areas to detect any statutory nuisances, and to take such steps as are reasonably practicable to investigate any complaint made by a local resident.
Section 80 of the 1990 Act provides for the serving of abatement notices where a local authority is satisfied that a statutory nuisance exists, or is likely to occur or recur. Section 122 of the Railways Act 1993 provides the railway companies with some defence where they are working as a statutory authority, but it is not an open-ended defence. It would be up to the local authority to convince a court that the noise generated was greater than might be reasonably thought necessary in order for the companies to carry out their statutory functions.
Having set out the policy and legal framework, I turn to some of the specifics of the case to which the hon. Member for Altrincham and Sale, West has referred, which are particular to his constituency. I am advised that, in January 1998, for safety reasons, Brunner Mond had to replace the rail wagons that it was using to transport limestone from Buxton to Northwich. The company changed from four-axle to two-axle wagons. At the same time, the rail freight operator, English, Welsh and Scottish Railway, introduced a single class 60 locomotive in place of the two class 37 locomotives previously used on that service—thus reducing the locomotive weight by 85 tonnes.
As the hon. Gentleman has said tonight, since those rolling stock changes, complaints regarding noise and vibration have increased. Those complaints centre on the


early morning full train and the apparent increase in noise from the two-axle wagons, which are more prone to vibration than the four-axle version. I understand that there have been discussions about the problems between Brunner Mond, EWS and Railtrack since early last year. The first solutions discussed were those of re-routing or re-timing the trains. However, the lack of an alternative route and the heavy use of the route by passenger services during daytime hours meant that those were not practicable solutions.
I understand that another possible solution, to replace the wagons, is now the favoured option. New wagons are part of a wider strategy of investment in the Brunner Mond rail operation, which will also involve improvement of the loading and unloading facilities at either end of the route.
The upgrading proposal is the subject of an application for freight facilities grant, which I know is supported by my hon. Friend the Member for Weaver Vale and which is currently being considered by officials in my Department's freight grant unit. I shall endeavour to keep both the hon. Gentleman and my hon. Friend advised of progress.
I understand that EWS and Railtrack have acted earnestly throughout: playing their part in assessing the size of the problem, engaging constructively in discussions about long-term solutions; and suggesting the short-term measures to improve the situation.
I also understand that Railtrack, following discussion with local authorities along the route, engaged an independent contractor to undertake a vibration survey inside a residential property in Hale, another point referred to by the hon. Gentleman. The property was selected on the basis of it being 10m from a section of jointed track, near a crossover and level crossing, in an area where trains accelerate and decelerate.
Although the incidences of freight trains passing during the 24-hour test period were said by residents to be typical, they indicated that there had been previous instances of greater vibration from the worst trains. However, Railtrack and its consultants concluded that the measured vibration levels were so low that even the worst trains were unlikely to have given rise to cosmetic building damage, although vibration, even at this low level, would be perceptible to residents. The local authorities have also undertaken such vibration monitoring and their conclusions were in line with those of Railtrack.
I understand that EWS has agreed to the placing of a four-axle wagon in the middle of the existing two-axle wagon formation to ascertain whether this might decrease the vibration between wagons and therefore reduce the noise and vibration overall. I am also advised that EWS has agreed to consider running a test service composed of wagons comparable to those which it is proposed to introduce next year. If the company proceeds with this service, vibration will be monitored along the route.
In conclusion, perhaps I should refer to the final option for the Brunner Mond traffic: that is to transport the limestone by road. I have no doubt that we can all agree that such a move, which would add 72,000 lorry movements each year to the already congested roads of the area and cause considerable more air and noise pollution, would be entirely undesirable. I hope, instead, that Brunner Mond, EWS and Railtrack can between them bring about interim measures and long-term solutions to reduce the nuisance caused to the hon. Gentleman's constituents and those of my hon. Friend the Member for Weaver Vale. I have little doubt that they will both continue to ensure that my Department addresses these issues.

Question put and agreed to.

Adjourned accordingly at eight minutes past Eleven o'clock.